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Here are 5 reasons why you need to draw a financial plan

While most people don’t find it necessary or even important to have a financial plan; it is tragic not to have a one. A financial plan is one of the pillars on which your financial success depends on. In fact for one to achieve financial success one has to have a plan. A financial plan will tell you where you are at the moment, where you need to be at some point and how to get there. Some of the reasons why you need to draw a financial budget are;

  1. SATISFACTION ; How would you feel knowing that you can handle anything no matter what the future throws at you? I think you already have the answer but no matter the answer you had I’m sure you will be proud of yourself, you will be satisfied and maybe you will drink to that. That is the kind of feeling one gets after he draws a perfect financial plan and everything is going as planned, everything is falling into place and all pieces perfectly fitting in the puzzle. A financial plan will increase your satisfaction by reducing uncertainty about your future needs and resources. After drawing a plan you will be sure what path to take, what you are aiming to achieve, what you want for yourself, and how much you need to accomplish everything you set out to do. This will reduce uncertainty as the path will already have been cleared and only walking down that path will be the only remaining task. You want to have such kind of satisfaction? Start drawing a plan.
  2. EFFECTIVENESS ; A financial plan will increase ones effectiveness in obtaining, using and protecting his or her resources through a lifetime. Since you will be having the information beforehand about what you need to do with your resources at what point of life, you will be thorough and this will bring about what we call effectiveness. With effectiveness one would be able to obtain additional resources, one will have the ability to protect his resources so that he would avoid losing them, one would also be able to use the resources he or she has gathered because they will be having a guide on how to use the resources without necessarily misusing them.
  3. CONTROL ; A financial plan will give one increased control about his or her finances and hence avoid cases like bankruptcy, dependence on others and even debt. You have been given a math sum to work out and with it you have been given a step by step procedure on how to do it. What are your chances of failing? I’m sure even the dumbest will pass with flying colours and that is what is called Control. You are in charge of the situation. A financial plan gives you the pleasure and ability of becoming in charge. In other words it makes you the boss. You becoming the boss of your situation and controlling it in the way you see best fits you. Well those who have always been aspiring to become bosses here is your chance, don’t screw it up. Become a boss and be in control by making a financial plan.
  4. FREEDOM ; After drawing a financial plan, one would be free from financial crisis. Let’s face facts; without a financial plan you are a prisoner. I know you will be asking yourself how? What name do we give to somebody who does only what other people wants him to do? You’ll look for a proper word but you will not be able to find it. So I guess we just call them prisoners. Without a financial plan many people soon find themselves in financial crisis. Having themselves caught up in some huge debts that they cannot pay and in worst cases they can even become bankrupt. To foot their billls they get themselves doing odd jobs to survive. They turn into slaves to get cash. The complete opposite happens to the one who has a financial plan as he knows what path he should follow without veering off into such financial crisis like huge debts. They thus buy their freedom as they are able to do what they want in the process of getting money. Isn’t that nice?
  5. ENHANCEMENT ; A financial plan will enhance ones life quality and also his or her personal relationships. A financial plan will steer you in the right direction always. You will already be having goals you set in your financial plan and each goal you achieve will be an improvement of your life. An improvement is an enhancement of quality. Through a financial plan you will also enhance your personal relationships with people say your family, your children, your wife etc since in the process of your financial planning you will have born them in mind. And whenever whatever plans you had for them succeed they will be surely pleased with you and this way your personal relationship with them would be stronger than it was before. Who doesn’t want such a life?

I would encourage those of you who don’t have financial plans to start writing down one. It is for your own good and later you will find yourself appreciating my advice. If you do not know how to go about making a financial plan check out the link below on how to go about it;

READ: 6 Steps to follow during the financial planning process