I recently had the opportunity to speak to a group of women, all between 20 and 30 years old, about money. Many of them were living on their own for the first time and just starting their careers. It was also the first time they had ever talked to a professional about their personal finances, and many said they felt empowered by the experience. I was a little surprised (given the youthful audience), when I asked the question, “Do you worry about money?” The answer was a unanimous: “Yes!”
Why You Should Get Started with Financial Planning Today
One thing I know for sure is that if these women start financial planning now, they will worry less about money later. There are simple truths about money (such as compound interest, asset allocation and diversification, and living within your means) that, if put into practice early, will pay huge dividends later.
So, what is financial planning?
Financial Planning is a process that throws a spotlight on your personal financial situation. It’s a process that lets you know if you are on track financially to reach your short- and long-term goals. It takes courage, but keeping your finances in the shadows because of fear, disinterest or lack of time just won’t cut it if you want to reach your goals and live worry-free later in life.
Financial planning is a series of steps you take that will answer and provide solutions for questions like:
- Living within your means?
- Building a cash reserve for unexpected expenses or possible job loss?
- Saving enough for your most cherished financial goals and retirement?
- Investing your savings in a broadly diversified manner?
- Using debt, such as your mortgage, wisely?
- Adequately protecting yourself and your family against loss with insurance?
- Taking advantage of tax-saving strategies?
- Planning for future generations with a sound estate plan?
- Maximizing your employee benefits?
- Managing your stock options for maximum benefit?
- Thinking about how you will pay for long-term care costs?
The goal of a good financial plan should be to get to “yes!” on all of these questions.