“Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy”- Groucho Marx
Having a financial plan is a sure avenue towards attaining financial freedom, but having a balanced financial plan is more important that having a mere financial plan.
We have different financial priorities at different stages of our lives. At one stage we are driven by the desire to fit in and this influences our finances and at another stage we strive to be independent and this also influences our finances. Regardless of this, a balanced financial plan is still important.
A balanced financial plan is like a three-legged stool, remove one of the legs and the stool is unsteady and may crash, taking you with it.
Important aspects of a financial plan can be placed into three broad categories:
- Budgeting and saving
- Investing
- Retirement
Budgeting and Saving
If you want to effectively manage your finances, stick to a budget. There no two ways around this. A budget increases your consciousness when it comes to spending, a guideline that helps you spend money on things that matter the most.
The absence of a budget reduces the chances of ever being able to save; following a budget creates money for savings where you thought there was none.
We understand that formulating a budget or sticking to one can be a tricky affair, click here for a user friendly budgeting system that will help you.
Investing
Financially successful people were brave enough to take a risk and invest the little that they had. Investing, like sticking to a budget is a very tricky affair which must be approached cautiously. Many have lost lots of money, but still investing is an important aspect in having a balanced financial plan.
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Retirement
It’s quite sad to see old people, who ought to be at home relaxing, toiling instead and sweating off their backs trying to make ends meet. While many are placed at this due to various circumstances, lack of a wise financial plan will definitely land you in this situation. Save yourself the trouble and make wise investment decisions, or better still, take a pension scheme, they tend to be very affordable these days.
Click here to read about preparing for retirement
The absence of a budget reduces the likelihood of being able to save, limiting your investment capability and subsequently denying you the opportunity to retire in peace. Be smart, balance your financial plans.