Why Have A Financial Plan?

By: Martin Lukac
Submitted: 2007-01-17 16:17:39
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

When it comes to money, planning and preparation is always a good idea. While things might not always follow your plan, the plan itself will help keep your finances focused on your goals.

But why is it really that important? Your parents probably didn't have a financial plan. But we aren't living in the same world anymore. Credit is out of control. People live longer. Social security is always at risk in the future. Health care for the elderly isn't cheap by any means. Planning is important for many reasons.

A financial plan will help protect you and your family from many risks, such as not having a home, going bankrupt, losing everything you own in a lawsuit and other disasters. These events can be caused by a variety of happenings, such as injuries, illness, death and credit cards.

By having a financial plan, you are protecting your family's finances. You have the proper life, homeowners, auto and disability insurance. You have a will. You have an emergency fund. You have little debt and a lot of credit. You have equity in your home.

All those things might seem like a wonderful dream. But they aren't just a dream. They can be a reality through -- you guessed it -- financial planning.

Total consumer debt in the US is in the trillions, not counting home mortgages. Research shows that Americans have between 8 and 10 credit cards each. The average consumer has a credit card balance of $8,400 per card.

Debt makes it impossible to save for your future. If you want your to pay for your child's college, you have to get rid of your debt. If you want to retire comfortably, you have to get rid of your debt. Your financial plan should focus first on debt reduction, then on saving.

Why save? Because you will probably live until you are 90. Maybe even 100. People are living much longer. You will have to have a lot of savings to support yourself for 35 years after you retire. Most financial planners say that you should plan to live until you are 95, though that could be a low figure.

Financial planning gives you a better quality of life. You have less stress and enjoy your daily life more. You are able to pay for things without credit, such as your daughter's college education some day. You are able to drive a nice car without the large payment. You can buy a home for your family. You can retire when you want to.

You aren't hounded by creditors. You aren't trying to stretch pennies into dollars. You aren't awake at night wondering how you'll survive.

You have a plan that provides for you and your family. No, you can't prepare for everything. Despite the greatest plans, life has its own ideas. But a plan is beneficial to your present and your future. Take the time and form a financial plan. It will pay you back tenfold.

Martin Lukac http://www.MartinLukac.com, represents http://www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

Article source: Expert Articles

Most Recent Articles in Personal Finance category

  • How Not to Blow the Student Budget - By: Victoria Cochrane
    Student life is great. The associated costs however, are not. Read on to find out how you can make the most of your student budget.
  • Promote Your Property with a Personal Loan - By: Paul McIndoe
    Selling property entails much consideration from redecoration to refurbishments, sprucing up the garden and advertising your abode to potential buyers. A personal loan may be just the ticket you need to get on the road to property selling success.
  • How to Keep Track Of Outstanding Balances - By: Adam Singleton
    It's easy to whip out a credit or store card to pay for something, but knowing what you will be paying in interest is vital if you do it all the time. Here are some tips to make sure you stay on top of things.
  • Budgeting For Retirement - By: Jeff Nelson
    Retirement can be a great experience if you plan for it, don't let planning for the rest of your life slip away from you.
  • Planning a Vacation on a Budget - By: Jeff Nelson
    Planning a family vacation on a budget can be very easily if you take these few steps into consideration when planning!
  • Top Tips on How to Budget your Money - By: Jeff Nelson
    Attitude is an extremely important factor in determining the success of your budget. Make sure that you start your financial planning with the right attitude.
  • From Chip and Pin, to Wave and Pay: the Cashless Society of the Future - By: Adam Singleton
    Whilst some predictions of a cashless society by 2012 may be a little wide of the mark, it certainly looks a probability at some point, thanks to the ubiquity of chip-and-pin technology, and the development of new 'wave-and-pay' technology.
  • Economic Crisis Spurs Importance of Budgeting - By: Jeff Nelson
    The importance of budgeting is now being seen as the economic crisis is affecting the daily lives of all Americans. Be smart with your money and determine your budget with help from useful tools on the Internet.
  • Speedy solutions for modern-day madness - By: Isla Campbell
    With speed and security two of its biggest advantages, the contactless credit card is a great way to eliminate such tedious activities as queuing and carrying small change. Read on to find out how it can revolutionise your shopping experience.
  • Going Green on Strict Budgets - By: Jeff Nelson
    By going green you will not only help the environment you will save money on your monthly budgets.