Only thirty percent of adults have a long term financial plan. This means that only one in three of us actually uses some sort of household budget when making purchases. This can have a profound negative effect on your longterm financial well-being.
You might be wondering “What’s the importance of a financial plan anyway?” Well, we plan (see what we did there?) to show you the importance in this brief article.
Table of Contents
The Importance of A Finacial Plan
Whether you dream of owning a home , a new car, or traveling the world in retirement. What if your car breaks down and needs repairs? They all have one thing in common. They all cost money, significant amounts of money.
Emergency Funding
Emergencies happen to all of us. If you were to unexpectantly lose your job how would you pay your housing and utilities bills? Would you be able to keep your car paid and maintainenced?
A financial plan can help you you plan for these kinds of things in advanced. So you wouldn’t need to stress keeping the lights on and feeding your family.
Retirement
Have you thought about how you’ll pay for your retirement? You’ll have social security but that is very limited income. If you plan to live comfortably or travel during retirement you’ll need more than just social security benefits.
Family Planning
If you’re planning on having a family of your own do you know how you’ll pay for it? Raising a family can cost a significant amount of money. Diapers alone can cost over a hundred dollars a month.
By having a finacial plan you can see how much your growing families could cost. Leaving you better prepared for these expenses when they come up.
Improve Your Standard of Living
When you pay attention to what your spending your money on its easy to see where you can have better use of your money. The average candy bar and drink at the gas station cost about $5. If you commit to saving this instead of making impulse buys you can save $25 a week.
Once you begin to save money, you begin to build a bigger cash flow. Helping you build a better quality of living for you and your family.
Finacial Understanding
When you’re creating a personal financial plan you are taking the time to learn more about finances. You understand more about your personal situation and how to make it better.
The more you understand about your own situation the better you can learn to grow your savings and assets.
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We hope this short article has shown you the importance of a finacial plan. If you enjoyed this article please remember to share it on social media with your friends and family.
We have other great articles like this one on our blog milestonemagazine.com be sure to check them out too.
