| Learn Early To Work With A Financial Plan
Why A Young Person Will Benefit From Financial Planning
A personal financial plan is a master plan for a person's financial future. It provides a grand design to shape one's financial direction and achieve a targeted end. It becomes a blueprint encapsulating a person's financial goals and the road map to attaining them.
A financial plan will therefore rightly begin with a clear assessment of one's present position, not only in terms of networth but indeed including skills, strengths and also weaknesses or handicaps. It then proceeds to capture in a committed manner, one's firm vision of specific financial accomplishment and standing over a future time span. A long term expectation should be further phased into shorter spans to drive performance. Critical to all this is the third dimension of carefully articulating measures, actions and life-style choices that would support the attainment of the set financial goals.
Against this backdrop, the big question might be whether a young person needs to bother about a financial plan when he is hardly able to chart his feature. Shouldn't such planning be left to elders who have responsibilities to shoulder? Well, if you are a young person and thinking in this line, you've got to think again. There are very good reasons to begin early to plot your financial direction and build the mind set, financial knowledge and supportive habits to take you there. I'll let you into some here.
Learning From Elders' Mistakes
Most of the difficulties and financial trauma encountered today by many of the elders you see are the direct result of the failure to learn early to plan their financial direction and future. For a number, they may never get to learn and may as well be condemned to a life on the fringe. For many (yours truly for one), they got to realise rather late that the game was far gone and chances are getting slimmer by the minute. That's when they begin to pray for extra time, hoping to score a late clincher. For you, you have the grace, God willing, of all the time to design, pursue and accomplish a winning financial plan. Starting early is the best gift you can give to your life. Use a financial plan to articulate your financial destination and how to accomplish it. Your possible mistake: to proceed on an uncharted course and end up wondering how you got to nowhere.
Flexibility
A plan is hardly ever cast in iron, so if your worry is that things might change from what you think and see now, that's not a problem. You can always re-evaluate and even revise your plan. That's the way it works and, seriously, that does not in any way detract from the importance or validity of your financial plan. If you think that having to review your plan vitiates it or is a good reason to coast along without one, you are dead wrong. A good plan will keep you on track and ensure you optimise your talents and opportunities and, when there is good reason to make alterations, that's still in line. It all ensures that at each point, you are being the best you can and want to be.
Money Wisdom
Trying early to learn to and going on to develop a financial plan immediately takes you miles ahead of your peers. Why? Because even the process of trying to get this 'project' through will open your eyes and mind to a lot of knowledge and ideas that will mould your life. If you decide today to work on a financial plan for your life, you're sure to ask questions, read literature or make some enquiries to help you know what to do and how. That process in itself will likely leave a fundamental impact on the way you see things and what will constitute priority to your life. You are likely to reap the reward for the rest of your life.
Clear Choices
As stated, a financial plan will compel you to make choices. You don't set goals and just accomplish them. An action plan, a path will be pursued to attain them. That simply means you will be forced to make clear choices as to what you want to do with yourself. Believing that you will be making good choices - you don't sow cassava to reap cocoyam - this immediately sets the tone for a focused, progressive and ultimately successful financial future. Simply put, you will pursue opportunities with vigour and a sense of mission when they arise, you will curb wastages in your life, and most of your actions will be those that are in synch with your financial objectives.
Money Grows, Given Enough Time
The time value of money tells what impact time could have on N1 you invest today. Interest compounding is one tool that poignantly demonstrates that fact that, given enough time and safety, your investment would grow substantially. Granted, it is possible to achieve financial success over a relatively short period if you deploy strategies that can achieve that. But not everybody can successfully do this. What is more certain is that anybody that puts some investment to work over a long period will reap significant growth. You could almost say it is the guaranteed way. What this means is that if you position yourself properly early in life, the battle is more than half won.
Financial Confidence And Independence
Getting a financial blueprint worked out will clearly leave an immediate exhilarating effect on you. That "I've done it" effect. More importantly, you would be imbued with confidence that will leverage you to success. Think about how you'd feel when you know deep within you that you've mapped out a clear, attainable path to your financial success. Yes, its not done yet, but you outlined how to get there. If you did a good job of it, you would almost feel it's already done. Life will become exciting. This will simply make you unstoppable. I expect too that you'll begin to feel a sense of independence. No, not in terms of unruly behaviour but by way of taking charge of your life and wanting to rely less and less on parents and guardians for your future. With a financial plan, you have a benchmark for judging your progress and motivating yourself.
You could still find tonnes of more good reasons to programme your life early for success and financial independence through financial planning. However, only one of the listed reasons is enough to move action. After all, "a word", we say, "is enough for the wise". So, get going and do what will leave a lasting positive impact on your life.
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