5 Reasons You Need to Focus on the Importance of Financial Planning Now, Not Later
28 Aug 2018
There’s no time like the present, the same goes with your finances. If you’re waiting for the perfect time to start planning, don’t! Uncover the importance of financial planning in our helpful guide and discover why you need to be focused on your finances now, not later.
Failing to plan is planning to fail.
Or so the saying goes.
But according to a survey by Bankrate, as many as 61% of Americans wouldn’t have $1000 in savings to cover an emergency expense.
Statistics like this demonstrate the importance of financial planning. But there are many other benefits to getting an early grip on your finances.
Keep reading for 5 reasons why you should focus on financial planning now, not later.
What is Financial Planning?
Financial planning is essentially about setting short and long-term financial goals and putting together a plan to meet them.
People often choose to work with a financial planner for this. They assess your financial needs and set goals with you, before helping you reach them.
Financial planners will help in different ways.
Common approaches include support with investments, planning for retirement, selecting the right insurance and creating a tax strategy.
5 Reasons to Think Early About the Importance of Financial Planning
Here’s why we think it’s crucial to begin your financial planning journey as soon as possible.
1. To Develop Financial Understanding
It’s important to have a solid understanding of your finances and how to reach your goals.
But there’s a lot to take in and it takes time to learn.
Starting the learning process as early as possible is helpful for getting your finances in order.
2. For Help Meeting Your Goals
Financial planning is designed to enable you to meet personal finance goals.
Whether you’re aiming to maximize your 401k, meet student debt obligations, or even looking to buy a new car, or house…Planning finances can help.
And the sooner you start, the sooner you get there.
3. Because You’re Playing the Long Game
Financial health doesn’t happen overnight. There’s a definite process involved.
Similar to physical health and fitness, you have to start early so that you are not working uphill. If you start developing a healthy lifestyle of good nutrition and fitness early on, you will only be maintaining your health. If you start late, there is a good chance that you will be battling bad habits, tendencies, and maybe even health issues due to poor nutrition and lack of fitness. Don’t wait to start your physical or financial planning.
From initial planning stages, to monitoring of spending patterns, to increasing your cash flow and accruing more capital, on to investing and so on…it takes time to improve.
Even if it’s small steps, you can never start too early.
4. To Start Saving For a Rainy Day
As we’ve seen, most Americans have savings of less than $1000.
Considering how frequently emergency funds are required, lacking money for these situations is exceptionally stressful.
Safe, liquid savings can bring incredible opportunities. How to get there? Start saving 15% of total net income to build up a cushion. When opportunities like market corrections come knocking at your door you will be in the perfect position to make a profit.
You never know what’s around the corner.
Financial planning is a great way to start saving for a rainy day. And the earlier you start saving, the easier it’ll be to handle life’s inevitable hurdles.
5. To Reduce Money Related Stress
Finally, planning early and feeling financially secure can prevent stress that’ll make you unwell.
Science proves it! A recent study found that financial security is a direct predictor of your wellbeing.
And importantly, feeling financially secure about the future was as important as feeling secure in the present moment.
Time to Hear From You…
Hopefully, these reasons highlight the importance of financial planning sooner rather than later.
Financial health requires a level of knowledge that takes time to learn. And there’s no time like the present to start the lengthy process of meeting your goals and saving for a rainy day. It’ll even enhance your wellbeing!
Now we’d love to hear from you.
What do you find most difficult about reaching your financial goals? Is saving tough? Or are you unsure where to invest your money?
Let us know in the comments!
And to speak to one of our own expert financial planners be sure to get in touch now.