Financial planning is a very important aspect of human life. The modern world demands that people have some financial literacy to live well with others. Why? People are more focused on making money than learning how to use it. They’re worried where the next coin will come from instead of how it will be used efficiently.
Financial planners exist mainly for this purpose. They help people maintain and improve their financial status by guiding them on how to use money properly.
This article explains 5 important teachings learned from a financial planner.
Setting financial goals and objectives:
“A person with a plan can beat a genius without one” This insists on the importance of planning in financial management. A person should indicate his/her goals and objectives to be achieved in a specified period. He/she must also have a plan in place to meet these goals.
For example, a short-term goal should have a plan that will be carried out fast. Long-term goals e.g. retirement should also be accompanied by plans. Setting goals and objectives gives a clear impression of what is to be done and how.
Set up a budget:
Everyone needs to know how much money is spent on acquiring their needs. A budget is a list of items from the highest to lowest priority. It helps in identifying critical needs and those that can wait.
It also gives an estimate of how much is to be spent on these items. Creating the budget will ensure that important items are bought first and that no money is wasted.
Spend less, save more:
Spending less doesn’t mean that a person should be a miser. He/she should not forego needs in the name of saving. Instead, he should spend as little as possible without compromising the needs.
Savings put a person in a good position to invest in future opportunities.
Never take unnecessary risks:
If an individual, business, or entrepreneur can sustain himself without taking debt, that’s the right way to go. Unnecessary risks pose a real danger to the takers. Financial planners know the dangers of taking unnecessary risks because some people never recover. Once the risk is taken, it may cause permanent damage. Financial planners strongly discourage people against this.
Prepare for the future:
It’s always advisable to prepare in case of anything. The future is ever uncertain. A good example is the current COVID-19 pandemic that broke out last year. Nobody saw it coming. Many people lost their jobs, others were stranded in their homes with no means to make money.
However, those who prepared for it are far much better than those who didn’t. A person who saved for an emergency is living life a bit normally than a person who didn’t.
Financial planners are experts on money management matters. A Financial planner like Michael Majeed and others are trained and qualified on helping people stay on track with their money. Michael Majeed Toronto is a top recognized performing senior financial advisor in the Toronto district. Some have years of experience in the field and have encountered hundreds of situations along the way. Maybe we can learn more lessons from them with time.