A detailed financial plan is an important part of helping to ensure that goals are met. It is the culmination of all the financial decisions you make in your life.
A financial plan can give you peace of mind, increase your confidence and provide focus, so you know where you are headed financially, both short term and long term. Financial planning can also help limit your risks by providing guidelines to take advantage of the opportunities that arise.
Financial planning also allows you to develop an investment strategy, get your personal finances organized, and handle emergencies more effectively, all while having fun!
Here is a list of 10 reasons why you need a financial plan:
1. It will provide your family with peace of mind, knowing that you are prepared to care for them if tragedy strikes.
2. It will give you the satisfaction that comes from knowing that all this time spent planning is actually working! You can see exactly where you are headed and move towards your goal more quickly and confidently.
3. When you know your financial situation, it is easier to make decisions and trade-offs that may impact your future security.
4. A financial plan will provide a road map for achieving the lifestyle you want in the future, as well as now!
5. You can take control of unplanned large expenses or accumulated debt before they get out of hand.
6. A written financial plan can motivate you to save money than just thinking about things in the abstract! Being aware of your current spending habits and how much you actually need to to to reach your short term and long term goals will help you stay on track to living the life of your dreams.
7. A financial plan will help you identify income and expense trends which can be used to make better financial decisions about your future goals.
8. Financial security is not just having a lot of money in the bank; it is more than that! It’s feeling secure and knowing that you are prepared to handle any financial setback that may come your way.
9. A good financial plan becomes an invaluable part of your personal legacy, giving your family a clear picture of where you were headed financially.
10. It will help provide flexibility in the future should you ever need to draw out money from other assets to fund other goals. Without a financial plan, you are much more likely to be forced to sell your assets at the worst possible time to meet expenses that come up unexpectedly.
Having a good financial plan can provide a sense of clarity and motivation that will help you get the most out of your money.