Advantages of Financial Planning
By: Arthur Cockett
Introduction ď ˝
Creating a financial plan helps you see the big picture and set long and short-term life goals, a crucial step in mapping out your financial future. When you have a financial plan, it's easier to make financial decisions and stay on track to meet your goals.
Benefits of Financial Planning
Cost Controls Cash Flow Management Improved the Debt Settlement Reduce your cost of personal finance Estate Distribution Future Visibility Improves Risk Management
Cost Controls ď ˝
One of the most crucial benefits of financial planning is the ability to control costs. Creating annual budgets lets you see your big expenses, plan for them, reduce them if necessary, and monitor them to see if you are on track to meet your goals.
Cash Flow Management
Just because sales are good doesn’t mean you’ll have that money when you need it. Financial planning includes cash flow management, identifying in advance your cash needs each month, regardless of your revenues. If you have slow payables or bad debt during times when you have high bills, you might lose the ability to order goods and services that keep your business running.
The interest on credit lines, loans and credit cards is a hidden cost many small-business owners don’t track, because interest is tacked on to a balance and doesn’t require a cash payment each month. A financial plan should address your monthly interest payments, putting them into your budget so you learn your real financial performance.
Reduce Cost of Personal Finance ď ˝
When you undertake financial planning, you can cut down on many personal finance costs. A good example is by doing away with expensive ULIP policies or any investment which carries high charges.
Improve Risk Management
ď ˝
Taking adequate life cover and health cover is critical. When you do financial planning, you can determine the amount of cover you need with greater certainty. Thus you do not overpay for unnecessary insurance and also do not end up with a lower than necessary cover.
Future Visibility ď ˝
Planning is for the future. While we have often heard quotes saying that you should live the present and not dwell on the past or worry about the future, when it comes to money, considering the future becomes very important. Financial planning helps you get visibility for next 15-20 years. You are able to get comfort on retirement and planning your money during emergency situations.
Estate Distribution ď ˝
They will writing and estate planning is an integral part of financial planning. When you do financial planning you can plan your estate distribution after your time, such that disputes are avoided.
Who I Am.. ď ˝
Arthur Cockett provides the useful benefits of financial planning through which you can easier to make financial decisions and stay on track to meet your goals.