Weekly Reflections #16 : Financial Planning

Hello everyone how are you all doing today hope you are having a wonderful day I'm glad to participate in this contest that @damithudaya organized it's an interesting contest.

Source

Do you think Financial Planning is important and why?

Yes, financial planning is extremely important for several reasons first is Goal Setting: In this case, the content planning is therefore defined as the act of planning on how to do the following, that is, within the next five to twenty years; it may be having plan for buying a house, planning to save for retirement or to provide education for a child. It is accompanied by a guide as to how they can be gotten there, since progress toward such objectives is laid out.

Budgeting: In this way, by drawing even a simple financial plan an individual has to arrange all the sources of income and expenditures in a concrete planner. It also helps in management of money as well as in cases of budgeting or in a manner that makes one reason and think critically before spending his/her money.

Source

Risk Management: Budgeting strategies include the aspect of health hazards, loss through fire or any other disaster or even decrease in the number of revenue earning avenues. This makes it easier for coverage to be established to complement the insurance so that a disaster fund can be formulated to contain such risks.

Investment Strategy: This is related to the financial plan as an investment strategy that alised on the risk, returns and the time horizon of the investor. The strategy is thus useful in the sense that it helps organisations to obtain good returns without necessarily having to undertake higher levels of risks.

Retirement Planning: One of the most crucial aspects of budgeting is the provision for what may be needed in the future; especially for one’s retirement. The accurate plan of the financial life ensures that the retiree should have sufficient amount for savings and investments for the required style, without concerning the sources.

How do you track your expenses and savings?

In as much as tracking of expenses and saving is a way of financial planning to me this is how I track them I prepare budget Yes in my case I prepare a budget standard that contains the amount of money that is available for the month and the expenditure that is likely to be incurred this helps me to determine on which aspect I should focus my efforts to save and which should be emphasized on for expenses.

And another thing is that I do have receipts, that is, I save receipts of all the purchases that I have made, as well as digital receipts, and I would like to admit that this helps me to categorize my expenses correctly again is the fact that I do set specific financial goals, and this means indicating clear financial targets both for savings and spending, and this way this gives direction to work on and encourages me.

Source

It is wise and recommended that one develop a culture of keeping records of expenditure and savings on a daily, weekly or even monthly basis as it assist in identifying areas of concern and thereby allowing for remedial action.

Thus, my dear friend by following these my steps and being consistent with the tracking you too should be able to control your expenses towards the savings which will help you perfect everything which you’d like to accomplish financially.

What are some common financial mistakes to avoid?

There are several common financial mistakes that people should avoid to secure their financial well-being first is not having a budget: If a person fails to prepare and follow through the budget it could mean going overboard and being financially unstable and a key aspect of a working budget is the ability to monitor your earnings and expenses.

Another thing is Ignoring savings: Not setting up an emergency fund as well as not saving for retirement or any future endeavor is unrealistic, so one should learn to pay oneself first rather than spending money on unimportant things, having too much credit card or other high-interest debt also creates a lot of issues as one ends up borrowing a lot and having to pay way more than the original cost.

This I’ve why it is important to handle the debt properly and refrain from indulging in a lot of loans, or again, just putting all your money in a savings account where it will not grow, investing in the stocks, bonds, property, or even retirement plans it is a way of growing your cash.

I'm inviting @pea07 ,@kuzyboy and @dove11 to gladly participate in this contest.