Starting 2018 With Financial Planning

finance

We’re already at the end of the third month of 2018, and if financial planning isn’t in your New Years resolution, this is the best time to update that list. No matter how old you are right now, or what you’re doing with your life, financial planning is always beneficial. It won’t only get you more organized with your income and expenditures; it will also direct you into saving for your future.

Not much of a finance person? That’s fine, you can always hire a company to give you financial advice, or you can consult with your friends who happen to be studying finance. Check out the reasons below if you’re wondering why you should start financial planning for the rest of the year.

Inflation

Inflation is the increase or decrease in the value of a currency. It depends on the demand and supply for money in a country, and also the import and export. The products that you use daily are mostly produced abroad, and the price of those products can go up or down depending on the inflation from that country. One day your deodorant may cost 5 dollars, while the next day it may cost 6 dollars because now your currency is less valuable in the country where that product is produced. Financial planning will help you sustain inflation so that whatever the value of your currency may be, you’ll still be able to survive.

Long-term goals

We can name the most common long-term goals that every person has, which are purchasing a car, owning a house, education, marriage, etc. And all of these goals are not cheap. That is why you need financial planning to meet your financial goals and ensure that your earnings can be saved for it while still being able to spend enough for your daily needs and entertainment. It is better to plan now and possibly invest so that you may earn beneficial returns over time.

Insurance

A lot of people think that insurance is a waste of money and will trouble you, but this is wrong. Insurance is the only protection you can have for emergencies that will come in life. There are inevitably going to be times where you don’t have enough money for when you break your leg from a biking accident, or your house is suddenly flooded, or you want to pursue your Master’s degree. Financial planning would include purchasing insurances for these events, including the monthly installments you’ll have to pay for it so that you’ll get the security you need in life.

 

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Habits That Will Lead To Financial Health

Every day, we have choices to make. Such choices include should you have a fruit or should you have a pizza? Should you go for a run, or should you go home and watch a movie? We are faced with different situations that prompt up to make decisions. Some may be good while others may be bad and it is easy to form a habit from constant bad decision making. Just like physical fitness, individuals should have financial fitness. The only way to achieve financial fitness is by practicing good habits. This article shows some of the habits that are often overlooked, but they are the key to financial health and freedom.

Know How Much You Make And Spend

This is the first step to financial health. Be honest with yourself and compute how much you earn. If you have a fixed salary, that should be easy. If your salary is dependent on commissions, you can exclude that. If you have a business, you probably have a high and low season. Look at the trends of the last two or three years and come up with an average. After that, compute your expenses. Try to minimize the expenses by cutting off the unnecessary items so that you can save more.

Stay Insured

Studies have shown that medical expenses are the biggest cause of bankruptcy. Therefore, being insured will help you to keep your finances right. Surprisingly, individuals who have filed for bankruptcy before have been found to have health insurance. It is therefore advisable to get a cover that suits your needs. For instance, if you have dependents like your children or your wife, do not go for the cover that your single friend has.

Develop A Long Term Financial Plan

Having a sense of direction in your life is important. Have a plan of where you would want to be in a few years. Your financial future has more importance than the latest car, phone or even holiday. If you invest in such, make sure that you balance them out with your long term plans and work hard towards ensuring that you abide by your plans.

Get Other Sources Of Income

Your income matters a lot when it comes to having a good financial health. If you have one job, look for alternative sources of income because it is hard to thrive with just one income. Work hard now so that you can enjoy when you retire.…