Money is a vital aspect of life, but whether less or more, managing it can be challenging and can cause financial anxiety.
This situation, however, can be fixed with seamless and strategic financial planning, which is an ongoing process that examines every aspect of your financial situation to develop plans for both short- and long-term goal attainment.
It is a detailed overview of the financial situation, financial goals, and any plans set for reaching those goals.
It may ease your financial anxiety, meet your immediate requirements, and assist you in creating a nest egg for future objectives like retirement, Nerd Wallet reported
Why is financial planning important?
You might feel more secure about overcoming obstacles in life, such as a recession or historically high inflation if you have a financial plan set.
According to Charles Schwab’s 2023 Modern Wealth Survey, Americans with written financial plans feel more in control of their finances than people without one.
After taking care of your immediate requirements and short-term objectives, a financial plan can assist you in tackling longer-term objectives.
Thoughtful investing, for example, can help build generational wealth, and careful estate planning can ensure that wealth gets passed down to your loved ones.
Financial planning isn’t just about investing; it’s about what money can do for your confidence, security, and quality of life, such as the protection that life insurance offers or the peace of mind that an emergency fund can provide.
Research also shows that planning supports sound money habits as well. Below is a list of nine steps for you to follow for financial planning:
- Set financial goals.
- Track your money.
- Pay off your interest debts.
- Plan for retirement.
- Plan your tax payments.
- Invest for the future.
- Make a will.