Weekly Reflections #16 : Financial Planning

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INTRODUCTION

I welcome you all steemians in this community! It has been an interesting and awesome experience participating in various contests hosted in this community. This time around, it is another interesting topic to discuss coming from @damithudaya on the title: Financial Planning.

Before I go into discussion , I want to have a brief background on what financial planning could mean. This would enable me to address questions raised by the host of this contest.

WHAT IS FINANCIAL PLANNING?

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Financial planning could be looked at as the activity which involves designing financial measures that looks at the overall status of your financial health in order to enable you achieve your set goals. The activities of Financial Planning revolves on making plans on your savings, investing, insurance, taxes, retirement and other areas of finances.

Now, having given a highlight on what financial planning entails, let me address the questions raised by the host of this contest.

• Do you think Financial Planning is important and why?

• How do you track your expenses and savings?

• What are some common financial mistakes to avoid?

The Importance Of Financial Planning

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For goals to be achieved, there must be that intentional efforts that should be geared towards working out plans on how to achieve the goals. So financial planning is very important for us to achieve or accomplish our goals.

Below are some of the reasons financial planning is important:

On Savings:

There are times when we face some difficulties in life that needs financial solutions. Having an already financial plan on savings could go a long way to save us from the situation that we might be facing. So this calls for an advanced savings plan to be made in order to take care emergency situations when they arise.

On Investment:

Making plans on investment is also important as we give attention to other areas of financial planning. Investment could be long or short depending on your risk tolerance and goals. Having a financial plan on investment could enable you to acquire assets that you couldn't have originally been able to do. Investment comes with returns and it could be in stocks, mutual funds, digital assets like cryptocurrency etc.

On Income:

Having a financial plan on income would enable you to ascertain how much that would be needed for savings, investment, tax, and other expenses that you might incure.

On Improving The Standard Of Living:

When there is lose of Job or business misfortune the investment, savings or insurance plan put in place could be a come back power that would enable the family remain stable in the face of those challenges.

Financial Planning: would also ensure that how money flow in and out is carefully monitored to avoid frivolous spendings. With the design of financial planning, income would be closely matched with expenses and any loopholes would be easily detected. This is where financial prudence is put to practice.

On Financial Literacy:

In the course of financial planning, a person could gain valuable insights from the measurable financial milestones to be achieved. The impacts of the decisions taken and expected results would give a better understanding of financial planning leading to a healthy financial habits.

HOW I TRACK MY EXPENSES AND SAVINGS:

By Budgeting

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I track my expenses and savings by running a monthly budget. My monthly budget contains the following information:

• Record of daily expenses
• Record of daily and monthly income
• % of monthly savings made

At the end of the month, total expenses would be deducted from the total income:

Total Income ➖ Total Expenses = Disposable Income.

Now a percentage of the disposable income go into savings or investment.

Some Financial Mistakes To Avoid Include:

• Lack of control over spending habits

• Not maintaining or keep financial records

• Not saving in case of emergency

• Not following following through financial plans.

CONCLUSION

It is really helpful to have a financial plan in place no matter how little we might be earning. With it you would be able to ascertain your real financial status.
Due to unexpected events that may happen in future, financial plan put in place against unforeseen events of life, could easily be taken care of.

Having a financial advisor or planner by your side would be helpful to you. This would help you to avoid making costly financial mistakes. It would serve as a financial watchdog against financial mismanagement.

With financial plans put in place and followed up, the family and the financial future would be secured and saved.

Thank you for reading through this insightful and educative post.