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Do you feel overwhelmed when it comes to money? Are you unsure about the financial decisions you’re making? If so, then you may be in need of financial planning. Financial planning can help both individuals and businesses make better financial decisions that will lead to positive long-term outcomes. Below, we’ll cover what financial planning is, how it works, and why everyone needs it! Money Matters: What is Financial Planning and Why You Need It

Defining Financial Planning

One of the most important things you can do for your future is to get on top of your finances. This includes saving, paying off debt, planning retirement funds, paying off college loans, etc. A financial advisor can help you plan for all of these and more. They will listen to your needs, set goals for you to work towards, develop a timeline for accomplishing them in a way that works with your life and other commitments, and find specific investment products that meet those goals. Money Matters: What is Financial Planning and Why You Need It

Money Matters: What is Financial Planning and Why You Need It
Money Matters: What is Financial Planning and Why You Need It

Financial planning acts as an umbrella

There are many components to financial planning which can be broken down into four categories. These are retirement, children, life events, and philanthropy. Taking some time to write out a plan for these aspects of your life will help you feel in control of your finances as well as help you strategize on how best to budget for them in the future.

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Know what your goals are

Financial planning involves setting your goals. For example, are you trying to pay off debt? Start saving for retirement? Protect assets against lawsuits or creditors? Once you know what you’re trying to achieve, the financial planner can recommend the right mix of products and services to get there. Your plan will be based on your current situation, such as retirement benefits or net worth.

Create a budget

Since money can’t buy happiness, it’s worth planning for when the hard times come around. Think about creating a budget in which you allocate how much of your income you’ll save every month, what bills to pay off first, how much you’ll spend on entertainment, and more.

Consider insurance options for you and your family

Personal finance plays a major role in a family’s well-being. The main goal of personal insurance, namely life insurance, disability insurance, homeowners/renters insurance, and auto insurance, is to protect your financial assets from unforeseen disasters. The same type of financial protection can be applied to any other unexpected event that would cause significant setbacks for you or your family such as health care expenses or lawsuits.

Money Matters: What is Financial Planning and Why You Need It
Money Matters: What is Financial Planning and Why You Need It

Get advice from the experts

Are you saving for retirement? Paying off your debt? Weighing how to pay for that wedding or honeymoon? And do you know the best way to handle your money at work or on social media? If not, keep reading for answers.

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If you answered no to any of these questions, then you may need help with your financial planning. But if the answer was yes, then think about whether it would be a good idea to check in with a professional.

Keep track of important documents

Your finances are something you should take seriously, no matter where you are in life. That’s why it’s important to have a well-organized system for managing your finances, which will help you make sure that everything from bills to investments stays organized. If you’re looking for more direction on this process, the following steps will get you started:

– Collect all of your financial documents. These include statements like your credit card bill and bank statements, as well as insurance policies, legal paperwork and investment information.

How to plan for retirement

The truth of the matter is that not a lot of people are planning for retirement. However, this does not have to be the case. A few simple steps to making retirement a reality can help you avoid stress about your financial situation later in life.

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Ask yourself these questions about your finances.

-Do you make enough money to cover your living expenses? -Do you have an emergency fund? -How much debt do you have? -Do you know how much money your debts are costing you in interest and other fees?-Do with the money if something happens to you or a loved one?

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By Niva Lohit

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