FINANCE MANAGEMENT 3 - Develop a Financial Plan

A financial plan is a series of document designed to help you achieve your short-term and long-tern financial goals. No one makes a head-start start in life without proper planning. A planned life will definitely achieve greater results than an unplanned one. Financial Planning is tracking where each unit of your money goes. It is being responsible with your money. To do well financially you must be in tune with the directions your money goes. You must have goals and set benchmarks for your finances. What financial plan does is to help you build wealth and create balance to your enjoyment of life with responsible investing, which will allow you live constantly at the level you have chosen.

According to the Lincoln Financial Group, three of the top five reasons why people fail financially are;
  • They have no financial plan.
  • They make poor investment choices.
  • They procrastinate in starting a savings plan. 
To create a financial plan, the essential ideas are these; asset-allocation, investing, living the frugal way, avoiding debts, insurance, and thinking long-term (retirement). You need to start a savings program, identify your long-term financial goals, protect your belongings by insurance, and consider a retirement plan. Experts says anyone above the age of twenty-one should have opened a lifetime saving account and started a financial plan, and that financial planning process varies from different age groups; 16-30, 30-45, 45-60, 60-70, 70 and above. As our financial expectations and expenditures changes considerably along these age groups. It is said that the best time to aggressively build wealth is between the ages of 16-30 years, as there are little or no financial demands and responsibilities.

Our life goals are obviously not the same but, same principles help lead to the realization of our diverse and varying goals. The good news is that you can be truly wealthy if you are consistent with the information you are learning. Your assignment is to take the law of averages , bend it to your financial advantage, and enjoy your financial rewards.

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