Despite the fact that you have a reasonably sized paycheck you never seem to have enough money. You are not able to pay your children’s tuition on time, you are always behind in your bills and you never seem to have anything left over that you can save for retirement. Lots of people live this way; they make good money but it never seems to take care of all their needs.
Many assume that if they get better paying jobs they will be able to do better financially until they realize that this isn’t true – as soon as they get a higher paying job they are back to the same old problems. The issue is not really how much you are making – it is lack of financial planning. Financial planning is one of the most important things that you can do if you want to be financially healthy and a responsible adult. Financial planning means that you know exactly how you are spending your money and it is directed towards your highest priorities. Here are some of the benefits of financial planning:
- Good financial planning means that all your priorities are taken care of – you are able to pay your mortgage every month, school tuition, credit cards and any other important bills that need to be settled.
- Even more importantly, financial planning means that you do not waste a single penny. It involves taking all the money that you earn and carefully allocating it. Whatever is left over can be saved for retirement or a college fund.
- Many people who begin to carefully plan their finances are able to save money. When it is carefully allocated they are able to pay all their bills and there is some left over. You shouldn’t be careless with whatever money you are able to save. You can direct it to an important project in the future such as retirement or college or invest it.
- Financial planning can make you a healthier person and here is how: when you are constantly behind in your bills you never have a moment of peace. You are constantly thinking about the money that you owe and this leads to heightened levels of stress which leads to poor health. A financial plan will allow you to enjoy life more.
- Are you a big spender? Do you buy items on impulse? If you are worried about the way you spend you can get it under control by coming up with a financial plan and sticking to it.
- Financial planning also allows you to plan for crises in your life. What would happen if you were to be presented a large hospital bill, or if an important project needed money? If you have been saving money over the years you will have a reserve that you can dip into, and your income will remain unaffected.
As you can see, financial planning is one of those things that you should never take lightly. Remember, for it to work you have to stick to your plan.