Don’t Dismiss Personal Financial Planning

With so many daily demands pulling at your personal finances, it is sometimes hard to step back, taking-in the big picture.  Yet despite the importance of addressing immediate needs, it is nonetheless vital to account for your long-range financial vision, in addition to day-to-day concerns.

Financial planning serves several essential functions, helping you manage income and cash flow, without losing sight of your monetary goals.  Valuable for reaching milestones visible on the immediate horizon, as well as financial matters impacting your distant future, effective planning is an essential feature of comprehensive financial management.

Financial Forecasting Keeps you Focused

Preparing for your financial future keeps you moving toward your goals.  That’s not to say you’ll always steer clear of unexpected events you didn’t plan for, but taking a proactive approach gives you a better chance of achieving your personal financial priorities.  Some milestones to consider as your financial plans come-together include the following:

Home Ownership – Home ownership isn’t for everyone.  Not only does owning a house call for substantial financial investment, but maintaining and improving residential property can feel like a full-time job.  There are financial benefits to buying, as opposed to renting, including tax breaks and equity you build as property values increase and payments reduce outstanding principal. But if you are not committed to the idea of owning a house, you’re financial plans should reflect it.  On the other hand, if it is a family priority, you should start planning for a house purchase as soon as you are able.

Personal Financial Planning

Once committed to buying a house, saving for a down payment is your first order of business.  A dedicated savings account, cut-off from your general financial flow, is a good spot to accumulate funds for a house down payment.  Before looking at homes, consult with a banker and learn about loans online.  Not only does the process reinforce your understanding about lending and economics, but exploring finance options ahead of time also defines spending limits, illustrating exactly what you can afford.

Family Holidays – Although financial planning is often associated with long-range goals and big-ticket buys, preparing in advance also helps firm-up funding for less lofty goals.  Family travel and holidays, for instance, can sneak up on your budget, leaving you short of money when you need it most.  A savings plan ensures you have resources available for travel or holiday entertaining, enabling you to pay as you go, rather than amassing deep holiday debt.[Continue Reading…]