The most important factor in every human life is financial planning. If you go any cities in the world they move all the time one place to another, mainly because to earn money. Even children are going to schools and teenage are going to college to study, then for what? Obviously to earn for the future. Every human being are having potential to earn money to fulfill their basics needs. But the major question is that every person is not making their financial planning.
The financial planning should of good motives. Financial planning in family life is most important. Its helps the person to overcome financial crisis when its struck their life, its good for future expenses of your needs, its good for your old age. Everything are having its own time. When you earn especially youngster should know how to control the money flow from your pockets. When making financial planning one need to understand the good return of their investment. Its all begins from home when you teach your children they will understand the value of money and how its should be handle. In the Holy Bible its says, giving is better than taking. If we have good financial planning that means we are maintaining good financial status. If you have sufficient, then it is possible for us to give.
Now we will discuss on the process of financial planning.
1. Determine current financial situation: It is our duty to determine our current financial status by day, by month and by year. This is the foundation of financial planning. We should understand clearly how much we are earning per day, per month and per year. Based on your earning you must be aware of your current basic needs expenditure through market survey. Then you must calculate your earning, minus your expenditure, it will show you how much you can save.
2. Develop your financial goals: After making the basement, you need to construct the pillars of investments. Now the goal is to make first floor. The pillars will be your investments planning, insurance planning, tax planning, retirement planning and estate planning. Then you need to analyse your savings how much I need to invest in each pillar to achieve my first floor.
3. Identify alternatives course of action: The purpose of this analysis is to differentiate your needs from your wants. You must be aware of good investment with good return and low risk, and need to take action accordingly. If you invest all your money without knowing that you have some other important expenses also will lead you in disturbance of investment. So, you need to take action that first you meet all your expenses and then go for investment, so that you no need to withdraw the money during the course of period.
4. Evaluates alternatives: Decision making will be an ongoing part of your personal and financial situation. Thus, you will need to consider the lost opportunities that will result from your decisions. Since decisions vary based on each person’s situation and values, opportunity costs will differ for each person. You must evaluates your action of investment and risk. Sometime people are earning earning and earning, invest it all without taking any insurance policy. What will happen then if you do not have insurance policy? Your all invested money will be waste, only because you did not take insurance for your life and family which is very important in this risky world. Hence, need to evaluate financial planning from every angle.
5. Create and implement your financial action: To implement your financial action plan, you may need assistance from others. For example, you may use the services of an insurance agent to purchase property insurance or the services of an investment broker to purchase stocks, bonds, or mutual funds. The financial planning is not an over night successful in investment. It needs times to develop towards higher level. Hence, need to start your financial planning wisely from today itself. Then only you will see the value of financial planning in the future.
6. Review and revise the financial plan: When life events affect your financial needs, this financial planning process will helps you to tackle the situation in smoothly way. Regularly reviewing this decision-making process will help you make priority adjustments that will bring your financial goals and activities in line with your current life situation. In your process of financial planning you need to look after all the areas shown in the diagram on your right side. You are at the center of your life with your earning. Now you need to think where you must sow your money and how much. Every financial moves should be meaningful in your life. Then only you will feel you are having profitable life.
Conclusion: Remember it always that money should not control you, but you should control the money. "A man going without the financial planning is control by money". Because, whenever circumstances arise in his life, money will say him purchase me with cost. Then he need to work more for the money because he needs money based on circumstances. So always makes good financial planning in your life.
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