Weekly Reflections #16 : Financial Planning

Hello, fellow friends in the house! I want to appreciate the organizer of this context and wish everyone the best in the week ahead. Thank you @damithudaya for the contest.

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Do you think Financial Planning is important and why?

Let's see financial planning as a process of creating a comprehensive strategy to manage one finances effectively, achieve financial goals, and secure financial well-being.

Yes, financial planning is important because doing that helps one save and invest.
Financial planning enables one to have proper planning for future investments.

It also helps in allocating resources to areas of need for efficient use. It's just like the budget that is allocated to different sectors to meet one's goals.

Planning well financially reduces some stress and fear of loss. i.e. it will enable one to understand where he spends and why the purpose of the spending.

It also helps in proper investment, which means one does not have to go into any investment without counting the cost.

It also helps to build confidence in spending, which means when one plans financially well, he will also be assured of benefits that will accrue to him.

How do you track your expenses and savings?

To track one's expenses and savings is to have a record book because one cannot have everything off-heart. Keeping records will help to know how you spend and why you spend.

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Besides having a record book, there should be another book where the expenses are orderly arranged to help understand the channels of where the resources go.

To track savings is to have a separate savings account from the account you use daily. Once the account is not separate, you will not be able to save as you expect.

One has to separate his savings from the main income to avoid touching the savings. If that is not observed, one will tamper with the savings unknowingly.

One should regularly analyze his expenses and savings to be able to know whether there are any proper savings or not.

There is an adage that says "There is no individual who claims to have the embodiment of knowledge" and so, one needs to seek financial advice from others to enable manage to save well.

What are some common financial mistakes to avoid?

One of the financial mistakes to avoid is spending without proper budgeting. Once one goes to spend carelessly, he will land in trouble shortly. Meaning, there are no focused goals.

One other financial mistake Is when one doesn't allocate the resources to areas of need accordingly. Some sectors will suffer loss to the detriment of others.

Improper planning towards the rainy days. Wealth is just like a messenger, it comes and either stays or goes back after a while. If one does not understand the message well and the messenger leaves, one will act accordingly.

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One may land in debt when not planning financially well because his expenses will exceed his income where debts will be created.

One other mistake is, once there is over-reliance on one aspect of the source of income. This means one has to think and diversify his investment.

There is an African adage that " One with two homes will be saved when fire or any disaster engulfs one of the houses.

In a nutshell, financial planning is importance because it helps to save the proper utilization of resources. And also to track financial expenses and savings is to have a record book.

This book will help to remind one of his direction and a financial advice is needed on savings towards achieving a set goal.

This is my story for the week and I would like to invite @vickyson @josepha and @simonnwigwe to join the contest.