The Need For Financial Planning

It is the process of consistently and effectively managing your finances for the long term in order to be able to attain your goals and aspirations.

So many things have to come together to aid your investment process. From saving, to cost management to even budgeting, there’s a level of backend work that is carried out before investments can be successfully made.

It is awfully hard to invest especially for the long term when you don’t have enough money to carry out your day to day operations. It also doesn’t work when you don’t have an emergency fund to meet up unexpected, pressing expenses as you will immediately want to pull out your funds from whatever investment you have plugged it to.

Your stock investments wouldn’t be able to grow that way and you might even incur losses in the process. The totality of what you are required to do is what is known as financial planning and it is as relevant to an individual as it is relevant to a business.

Financial planning is, in its simplest form, the process of planning and controlling your finances towards the end goal of financial freedom. It is the process of consistently and effectively managing your finances for the long term in order to be able to attain your goals and aspirations.

Whether you run a business or you simply want to effectively manage your personal finances, financial planning keeps you one step ahead of the possible curve balls or emergencies that life could throw at you, allows you leverage opportunities, and gives you the peace of mind required to forge ahead.

There are indeed many aspects of the financial planning process and they include budgeting, saving, retirement planning, debt management, investing, and more. While many of these concepts have been explained in detail, it is important to think of it as a holistic process and not take on individual concepts.

You cannot effectively invest without proper debt management and expense control and you cannot do those without a clear budget. You also cannot make a budget with just expenses; you need to have determinable streams of income to ensure that you have adequate funds.

It is the process of financial planning that ensures you have a reasonable balance between all your financial outflows and inflows for a level of balance to be derived.

For a business, financial planning gives you foresight. It puts you ahead of the market trends in your industry, allowing you come up with growth and expansion schemes that will guide the long term survival and sustainability of the company.

It allows you take caution as regarding the type of loans you take and the kind of opportunities you leverage. It also allows you plan for any uncertainties that may arise.

Whether you are an individual planning for retirement or your children’s education or if you are a business trying to grow or penetrate the market, it is important to step out of your routine and take charge of your financial narrative.

Write your financial story. Plan your financial future, and monitor your progress as you go on.

Written by Lawretta Egba.