Planning your finances is like a treasure hunt on an island of adulthood. From when you receive your first pay cheque to when you plan to receive your last, it’s important to have your finances sorted. Financial planning entails more than just saving money and investing it when you find a chance. The next paragraphs are going to uncover the dimensions of financial planning.
- Liability planning: Liability planning involves safeguarding an individual’s assets. The primary objective of liability planning is to protect and preserve an individual’s wealth rather than letting it be vulnerable to lose in a legal dispute or financial challenge. It’s essential to consult a personal financial advisor who specialises in liability planning to get personalised guidance. An advisor can help you develop a structured liability planning strategy that aligns with your goals.
- Investment planning: Before making any significant investment, it’s important to have your goals clear. A good way to do this is by planning your portfolio and aligning it with your risk tolerance and timeline. With strategic planning, you can diversify, allocate assets, and maximise your investment journey.
- Insurance planning: insurance planning is an essential aspect of financial planning, which may also be a subset of other financial planning strategies. Obtaining appropriate insurance coverage is necessary to provide financial protection to your assets and finances in times of crisis. Insurance can save you money when you face financially non-favouring and unforeseen circumstances.
- Tax planning: Taxes can sometimes sound like a monster trailing behind every financial decision you make. But fear not; taxes can be optimised, so you must pay fewer taxes while abiding by the laws. That’s what tax planning is all about.
- Retirement planning: Retirement is a checkpoint that many working individuals look forward to because they see it as an opportunity to reap the benefits of their lifelong hard work. However, this may not be the case when somebody steps into retirement without planning it appropriately. Even during retirement, you’ll need a source of retirement income which can create a financial safety net when you’re not involved in the workforce. You should consult a personal financial advisor who can help you plan your retirement before you actually consider retiring. Through this method, you’ll be able to forecast better what your life after retirement would look like from a financial standpoint.
- Will planning: While many people hesitate to discuss this topic openly, it’s crucial to plan who’ll get what after you’ve left this world. Early will planning can comfort you, knowing that the right person will inherit your financial kingdom.
- Education planning: As the name suggests, education planning is about laying out a plan to finance your education. This can be done by identifying the right investment opportunities or gaining adequate knowledge of financial aid opportunities.
Final thoughts:
Nowadays, platforms like Goal Teller and 1 Finance bring these personal finance related services directly to you through your smartphone, making it easier than ever for people to plan their finances.
Early financial planning involves a lot more than dealing with the money that you have at present. It involves planning for your future and safeguarding yourself against all financial risks that may arise in the future.