Financial Planning the process of meeting your life goals through proper management of your finances. All of us have financial goals; it could be
- Buying a home
- Saving for children's education
- Planning for retirement
- Plain wealth creation and management.
Whatever these goals, financial planning provides direction and meaning to all of your financial decisions and allows you to understand how each financial decision you make affects your life goals. With a solid financial plan in place, you can adapt more easily to life changes and feel more secure that your goals remain on track.
How to Make Financial Planning Work for You?
Set realistic goals
Set realistic goals. Set specific targets of what you want to achieve and when you want to achieve results. Be quantitative wherever possible. You may dream of your goals but be in touch with ground reality. Not all can be a Rockefeller.
Understand Risk and Return
Understand that there is no free lunch. Risk and return are interrelated. Set reasonable objectives. Do not expect high yield investments not to carry any additional risk, they usually do. Most people underestimate the stress of a high-risk plan on its way down. In most cases its better to be safe than sorry.
Review your Plans
Once the plan has been implemented, it requires a periodic review. This is imperative to adjust the plan to the changing situation in one's life, financial situation and income levels.
Start Early in Life
There is a myth that financial planning is for the elderly. The earlier you start financial planning the better of you will be in achieving your life's goals. It's more advantageous to save small amounts of money at a younger age than to wait till one is much older to save large sums.
Execute the Plan on time
Financial planning is a perishable commodity. What is available today may be gone tomorrow. Speed and timeliness of execution makes the difference between a millionaire and an average performer. If you have doubts about your ability to execute the plan in a timely.