Nobody plans to fail, but many fail to plan

When was the last time you took time off assessing your present financial situation and its impact to your future living standards? The answer most likely is a NO, more so because each one of us is busy living our present day life that we just don’t spare the time to take care of our future financial needs. Even if some of us were doing so, it is likely that there is no strict and disciplined approach to the concept.

In order to have a secure financial future, we need to commit to long term financial needs, but the majority of individuals around the globe have a very shortsighted view towards financial planning. Often people tend to procrastinate when it comes to their future financial needs and the belief among many is that they would have all the time in the future to take care of their future needs. The reality is that very soon time will fly past and we wouldn’t have done much and by the time we decide to something, it's either too late or too costly. Remember, More good things are lost by indecision than by wrong decision

Almost 95% of our worry and sense of insecurity emanates from our financial matters and these are mainly derived from the questions we have about the future. We are neither worried about our past, nor are we worried about the present and therefore all worries that we have is always about the future. If we were able to find an answer to the questions about the future, we would enjoy better Peace Of mind.

It is this peace of mind that leads to imagination and leads to creativity, which in turn leads to productivity and it is the productivity that leads to success and happiness. In order to achieve this success, we need to follow the systematic issues and concepts in personal financial planning

Having said this, lets dig a bit deeper into the anatomy of financial planning so as to get a broader view and learn how a proper financial planning programme will improve the quality of our lives.

Personal financial planning forms of four very distinct and specific parts and each one of them relates to different aspects of our lives.

Part 1: FAMILY WELFARE AND INCOME PROTECTION

For most of us, our family's present welfare and their future financial security, is the number one priority. Whatever we work for and sacrifice is for their better tomorrow. Having said this, as long as the breadwinner is around, the family is always happy and they go to bed with out any worries. But what happens when you are not around any more or are permanently disabled? Obviously we don’t want them to suffer regardless of whether we are there or not and our family should continue to have the same standard of living they are used to and our children should still go to the best schools. The loss of a dear one is very emotional, but an emotional loss coupled with a financial loss is disastrous and it should be avoided at any cost. LIFE INSURANCE, it is called so because it insures the future living of those whom you leave behind.

Part 2: OLD AGE INDEPENDENCE

Now do you know that the other word for independence is Freedom! Freedom is one of our most valuable assets we possess and this is more about having choices and our choices are limited only by our financial situation. The goal is to improve our situation. As mentioned before time will soon fly past and the day is not far off when we will be retiring from active work and the older we get the more the needs are growing and how are we going to plan for this. Statistics have shown that by the time people reach the age of sixty, a whopping 70% are either dependant on their children or relatives or friends or the state and all this because an efficient financial planning was absent in a majority of the cases in their early years of their career- start Planning for your Retirement early- Remember there are only two ways to make money- one your ability to work and second the money at work for you. It is the money that will work for your old age and to ensure this, save during the years of your ability to work.

Part-3: CHILDREN'S WELL BEING

Almost every parent is concerned about his or her children's future. But it is not education that guarantees their future but the quality and kind of education and the development that will give our children a better chance in life. The world today is getting more and more competitive and is likely to be so in the future and its going to be the survival of the best. So it is imperative if not absolutely necessary that proper plans are made about the children's future as early in their childhood.

Part-4: LIFE TIME ASPIRATIONS

All the things that we desire to have and experience in our lives. Things like expensive cars, holidays, money, recognition, status etc.

A fact to be noted is that anything and everything that we work for, live for and dream about fall in either of these four areas and therfore whatever money that we save or the wealth that we try hard to create and maintain will be for one or more of these four.

Of the above four areas, the first three deals with the necessities of our lives and the fourth one just adds colour to our lives and its makes our lives so much more enjoyable. However the unfortunate truth is that most people are largely pre-occupied with the fourth and pay very little or no serious thought to the first three, until such times it becomes absolutely necessary, but by then its becomes very hard and difficult or its just too late.

The irony of the whole thing is that when one takes care of the 1st three first, then the fourth part will automatically take care of itself.

Nobody plans to fail but many fail to plan!

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