Why is Financial Planning Important?

Why is financial planning important? That’s a question that seems like it shouldn’t even have to be asked, and yet so many people aren’t really planning for their financial futures. They sock away a little here and there. Maybe they have a CD. However, that sporadic, hit-or-miss approach absolutely will not cut it for the future. This is why it’s actually important to think about the answer to this question. Why is financial planning important? Mainly because you’re probably not doing it. 

And why would you want to? Retirement is about well-deserved rest, relaxation, and enjoying what you’ve earned. The problem is that most people are earning at the moment but not earning for the future. If you’re wanting to take a more proactive approach to earning for the future, then it might be worthwhile looking into something like der Bitcoin Robot Bitcoin Code or other investment robots that could automate various investment opportunities in your efforts for bigger profits for the future!

Why is Financial Planning Important to Your Future?

We can’t work forever, even though it feels like it when we’re in our prime. Whether you’re a laborer or a white-collar worker, punching a clock, or self-employed, you simply cannot work for your entire life. And why would you want to? Retirement is about well-deserved rest, relaxation, and enjoying what you’ve earned. The problem is that most people are earning at the moment but not earning for the future. 

Several studies out there have shown that most Americans are not ready for retirement. With little to no savings compared to their lifespan after retirement age, a large portion of the population will face considerable financial hardships in their retirement years – the years that are supposed to be the least stressful. With that in mind, it’s important to get started preparing for the future as soon as possible. Whether you’re 25 or 45, if you’re still working, every little bit helps. So let’s talk about how we can make a difference in our financial futures. 

Learn to Manage Your Money

Most people don’t really know how to manage their money. They think they do, but in reality, they’re still spending too much, saving too little, and not really budgeting effectively. Budgeting isn’t just about skipping Starbucks and brown-bagging it at work, although that’s part of it. It’s about personal finance management. It’s about setting short and long-term goals, creating a comprehensive budget, factoring in retirement savings, and more. 

Managing money is an entire post in and of itself. Heck, it’s a handful of posts if we really dive into it. Rather than do that, I have a great link to CNBC that covers personal finance strategy. This comprehensive personal finance guide is an excellent resource for all things money management. 

Photo by Avel Chuklanov 

Get a Good Budget Planner

Speaking of managing money and how budgeting works into that, using a good budget planner is a big help. You’ll want a comprehensive planner that can help you calculate the entirety of your budget, helping you break down needs, wants, and savings. In addition, a good budget planner will also factor in things like charitable gifts, recreation, and other miscellaneous things that are common expenses to families. 

Pigly has an excellent budgeting tool that checks all the boxes. Their tool allows you to enter a monetary amount and immediately breaks it down into either a 50/30/20 budget. That’s needs/wants/savings respectively. In addition, you can further break down your budget by expenses such as housing, utilities, food, transportation, and more. Finally, one thing I really love about this calculator is that it’s not just some boxes on a page. In addition to the financial inputs, there’s a ton of information that helps explain the budgeting process and what needs/wants/savings really are. 

Plan for Long-Term Care

This is another big factor in answering why is financial planning important. We’re all going to (hopefully) get old. What happens when we’re too old or infirm to take care of ourselves? Most people don’t have a plan. Well, they do. It’s their friends and family. That’s not a real plan. Long-term care planning is arguably one of the most important pieces of the financial-planning puzzle, and most people just aren’t doing it. This long-term care article on Marketwatch talks about just how unprepared most of us are for long-term care costs and offers some insight into just how important it is to plan for this part of our futures. 

Always Keep Learning

All of us tend to get set in our ways. We learn a thing, and we go with that forever. For some things, that’s perfectly fine, but it’s not for finances. The financial world is always changing, and we have to change along with it. It’s vital to our financial futures that we continue to watch and learn. In this case, we can listen and learn. There’s a list of 6 personal finance podcasts recommended by Forbes that can help us keep learning how to build our wealth and ensure that our futures are exactly what we want them to be. 

Photo by krakenimages 

Why is Financial Planning Important? It’s Your Entire Future

While money isn’t everything, it does make it possible for us to live comfortably. Coupled with the fact that we only have so many years in which we can make that money, the question of why is financial planning important quickly becomes apparent. In order to live we need money. In order to have money when we’re old and gray, we need to stock up now. That requires financial literacy, planning, and constant education on what to do with our money. 

If you’re just entering the workforce, you have a leg up, so make sure you use that time to your advantage. If you’re older, don’t worry. It’s not ideal, but you still have time to start building that nest egg, especially if you have a financial advisor that can help you be aggressive enough with your investment strategy while not being a crazy risk-taker. Wherever you are in your career, give the above links a look. They all have excellent information that can help you get started planning a financial future that is viable. 

 

6 thoughts on “Why is Financial Planning Important?

  1. Thank you for your valuable blog. I agree financial planning is important for future. Financial planning gives a direction to our lives. Without knowing our finances, our goals and the timeline we expect to reach each goal, life moves like a rudderless ship.

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