Importance of Planning your Finances; Benefits and Advantages.

Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals. Having a written financial plan gives you a measurable goal to work toward. Because you can track your progress, you can reduce doubt or uncertainty about your decisions and make adjustments to help overcome obstacles that could derail you.

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Financial planning is a crucial tool in growth. Written finical plan give you much benefits and saves you energies of dealing with the never-enough finances since you already have it in writing.

Here are some benefits of making a written financial plan;

Cash Flow

Increase cash flows by carefully monitoring your spending patterns and expenses. Tax planning, prudent spending and careful budgeting will help you keep more of your hard earned cash.

Capital

An increase in cash flow can lead to an increase in capital, allowing you to consider investments to work toward improving your overall financial well-being.

 Family Security

Providing for your family’s financial security is an important part of the financial planning process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.

 Income

It’s possible to manage income more effectively through planning. Managing income helps you understand how much money you’ll need for tax payments, other monthly expenditures and savings.

 Investment

A proper financial plan considers your personal circumstances, objectives and risk tolerance. It acts as a guide in helping choose the right types of investments to fit your needs, personality, and goals.

Standard of Living

The savings created from good planning can prove beneficial in difficult times. For example, you can make sure there is enough insurance coverage to replace any lost income should a family bread winner become unable to work.

by Hussein Waiyaki