Why Is Personal Finance Planning So Important

Financial Planning

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I know many of you once in life have come across in a situation where you have had to borrow some money from someone. And to get that some money the giver has made you listen to a long speech on how to earn? Why savings is important? And yes, this is the moment the thought about why personal finance planning is so important triggered in your mind. The examples of this experience go on and believe today they are in the list of billionaires. Yes, but you should sincerely plan.

Here Is The List Of Why Personal Finance Planning Is So Important

Manage Your Income:

To earn money there are several sources but to manage it, you have a plan for it. The money spending without planning is a disaster. Financial planning helps you to keep watch of where your money goes. How much money you save at the end of the month. How much money you do have for future emergencies. A good financial advisor will make your money more productive by giving you the right financial planning tips. If you are ready with financial planning, it will be easier for you to make strong financial decisions and keep a track record to meet you long-mid-short term goals.

To Secure Your Family:

Your earnings are not all yours, your family owes a lot in that. To secure your family financially is your moral as well as social responsibility. Right financial planning will help you in investing insurance and such health-related policies that will be beneficial for your family. If you are well with financial planning, it certainly gives you peace of mind. It gives you a feeling of being responsible and caring. Right financial planning for the family earns respect about you. Right financial planning surely adds an extra year to your life.

Investment Never Goes Waste:

Believe me, the right financial planning opens several right sources of investment. You can easily choose that investment which fits your goals, future needs, and social living standards. A right financial plan understands all the possible circumstances, risk factors, and objectives. You can invest money in the social security scheme. The asset without liabilities is one of the right financial planning. And from the future point of view, it is a better investment for your retirement.

Tax Planning:

The earned cash has several gates to outflow. Tax is such an object which keeps varying as per the elected government and an individual you must be ready for it. The financial planning helps you balancing tax expenditure, monthly budget, and other needful expenditure. There are several ways of investment to reduce your tax burden. And to know it is possible only after financial planning.

Capital Flow:

It is believed that the well managed and planned money gives a good return. The good return again needs to plan which can actually help in improving your overall social standards. It helps in difficult times.

Dare To Set Financial Goals:

If your financial understanding is better then only you can set financial goals. Financial planning helps you in achieving measurable financial goals by ensuring that you do not have to sacrifice your present living pattern as well as a burden or to be empty in the future. It develops your control over financial life that you have set so far.

Financial Planning Is Important Because:

  • It channelizes your money better
  • It helps in setting a big picture and to achieve short-long term financial goals
  • It guides you through investing in insurance, funds, bonds, taxes, and retirement planning
  • It is assured helping hand in the uncertainty or any family emergency
  • It is the better way to check your current financial situation against your future goals
  • It helps in identifying goals
  • It is only because of ‘thinking about financial planning,’ you collect your financial data
  • It is the best advisor to dream financially and put those dream into effect
  • It is the best method to monitor and to update your financial life

Financial planning is always considered as a territory only of rich people. But we are wrong here. Rich are rich because they have planned their money well. We may not build a factory and provide employment or wish to see in the list of billionaires. But our family members have all the right to live a good life and to get basic needs fulfilled. Financial planning helps you with bigger goals. It helps you in achieving short goals. It is a guiding source in your critical situations. The right financial planning Personal finance planning is very much important to enjoy a pleasant and satisfactory life.


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Annuity Selling Systems Review

Financial Planning

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Annuities are often sold to the public through the use of seminars. Unlike pre negotiation financing, structured negotiation financing does not depend upon the assumed strength of the negotiation, as the negotiation worth is currently identified. Even more over, an annuity or federal government bond generally ensures organized negotiations.


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How To Plan For Retirement?

Financial Planning

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I know ‘retirement’ is as insulting as erasing an existence. This is not the same as retiring financially. The old age needs a lot of expenditure that all the life that you have lived earlier. If you are financially stable after retirement, it gives you emotional stability as well as social and family security. This article aims to brief you about how to plan for retirement:

Simple Tips To Plan For Retirement:

Social Security Program:

A federal government scheme well known as Social Security is an initiative to provide an income source to the individual or legal dependents as in children, parents, and spouse. To be a part of the scheme you are required to get a Social Security number. During your work period, you are asked to pay Social Security Taxes, which later goes to the account of the trust fund. These trust fund in return to paid Social Security Taxes are liable to pay benefits to the currently retired individual or to the dependents who have died. Your every year work does matter a lot to be eligible and to get benefits at the time of your retirement. In general Social Security Administration offers four benefits, those are Supplemental Social Security Income, Retirement Benefits, Disability Benefits, and Benefits for the family members of the passed individual. To open the Social Security Account, you can avail online service from SSA. This online service helps you in keeping track as well as managing your account and benefits. It is open to making changes to the holders of the account.

Keep The Right Track Of Your Private Pension:

Most of the employers believe in providing conventional pension plan. To tell you the reality is that there is no harm or threat to your money. Only the thing you should remember is that you are getting the money that you owed, and not less than that. Most of the time in traditional pension plans the “miscalculation” is a common error. You should be ready to defend yourself and ensure that your money is protected.  If things go in the extreme, seek legal help. The other most important thing is to check whether your pension amount is taxable. Apart from this if you have any query related to your pension benefits, then the first person you should see is your Human Resource officer.

Federal Insurance:

It supports Private Pension. Federal Insurance which is aimed for Private Pension is a product of Pension Benefit Guaranty Corporation. It insures private-sector defined benefit pensions; which certainly pay some amount each month after an individuals retirement. Another plan that covered is cash balance plans, and it allows an individual to take a distribution in lump-sum. As the scheme name suggests, it is private pensions. It does not cover governmental, IRA, 401k plans, Military pension plans and other government related. You are the owner of your hard work income. So make sure claim your earned pension benefits.

Few important points to remember are: Make sure your insured plans are in the list of PBGC. PBGC helps all those plan holders whose plans are insured. It pays you money that you owed. It pays you all up to legal limits.

Thrift Savings Plan:

The Thrift Savings Plan or in short form TSP is a good retirement plan for the Federal employees. It is a retirement saving comes under tax-deferred type. It is as same 401(k) offered by many private corporations. It is a good option to save some part of the income for retirement. One more benefit of savings in TSP is it helps in tax reduction as well as receive agencies equivalent contributions.

Few General But Beneficial Tips:

First of all, make your mind clear about the reality that to continue your present status of life you will be needed money even after retirement. To fulfill this basic requirement, you must plan for retirement. The amount and planning are dependent on the needs that an individual would wish to seek attention.

  • Start early to plan for retirement
  • You should participate in every retirement plan offered by your employer.
  • You must plan for retirement as your spouse will be having same or more expenditure than the years you were earning.
  • You must have full coverage insurance plan.
  • See to advise of a financial advisor to build retirement savings.
  • Be practical
  • Use of retirement calculator to see at what age you can redeem your Social Security benefits.
  • It is advisable to go for a monthly pension. Lump-sum is beneficial if you are ready with a few good options for investment.
  • Early learning of how one can plan for retirement savings is always beneficial.
  • If you have any plan in your mind, do not hesitate to take the help of a financial advisor.

The right choice of your financial planning decides your life after retirement.  It is well said that after retirement your savings is the first family person that you can rely on and then come all your blood relations. Believe me, there is nothing wrong with it.


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10 Personal Finance Planning Strategies

Financial Planning

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Are you planning to reach your goals? Identifying strategies to plan your personal finance? We will help you in your financial journey. In fact, financial planning is a golden gate to achieve your short and long term financial goals. Personal finance planning strategies help you to design an accurate plan to make those goals come true.

Ten Personal Finance Planning Strategies:

Budget Your Money-

It is tough to manage money. A reasonable budget helps you in planning your personal finance. It gives you ideas about priority expenditure and saving enough to meet future goals. The general practice of budgeting is a fifty-thirty-twenty percentage of your total income. Fifty percentages is a slot for your daily need including grocery, bills, rent, and travel like things. Thirty percentages are for your family-social life as in exploring new places, restaurant and family dining, etc. The rest is for savings and emergency payments.

Emergency Fund-

Emergency fund can be managed wither every month or once every three months. It is always considered as good saving. You can use emergency fund for anything if unused for a while. But remember that you should not stop investing in or keeping aside your emergency fund.

Do Not Spend More Than You Earn-

To limit your debt and expenditure does not mean living a lower status life. If you observe well, we as a human tendency to spend on the repetitive things unnecessarily. You can pay on things which are your need. Savings never go waste. At least spend in such places which in return gives you assured income or say doubles your investment, e.g., property at an ideal location, house, office, an educational course, etc.

Limit Your Credit Card Use-

If the credit card used wisely, it is the best budgeting tool to manage your personal finance. Remember the credit card is the biggest debt trap. Before you swipe it keep in mind that soon you have to repay and overdue will charge you fine. It is most beneficial in a medical emergency. And terrible if used for regular shopping and dining. So it is advisable to have not more than two credit cards. And you should have control over its use.

Invest In Mutual Funds, Government Schemes, And Bonds-

It is well said that well-directed money is a boon in every financial emergency. You can plan your personal finance by investing some percentage of your earnings in mutual funds and such other schemes. It is true that if invested for the long term you get good returns. This type of investment is beneficial to achieve long term financial goals. By investing in schemes and funds, you also support industries and nation in the journey of development. You play the role of a loyal citizen.

Tax Breaks Maximization-

It is almost in every developed country that tax code is very complicated. Due to the tiresome tax system, a massive amount of money people keeps lying over the table for years and years. By tax breaks maximization you can free some of the money and use it at a better place. It helps you in reducing the amount you are actually taxed by the government.

Save For Life After Retirement-

Nobody retires ever. When it is related to financial planning ‘after retirement,’ then one must think about it. Old age needs a lot of money than any phase of life if you are not healthy enough. So, a good investment for retirement if one start the early age of earning life, it always pays better later at life. Many financial advisors suggest the retirement investment with compounding interest. A good retirement investment minimizes your financial burden of income tax. A good wait provides good returns.

Pay Off Loans As Soon As Possible-

If you are paying high-interest rates for your personal loan or say education loan, then it is better to pay principal amount faster. Another option is federal flexible repayment programs like ‘graduated or extended repayments,’ which can save some of your dollars for sure.

Insurance-

Your life is as important as your interest in understanding the strategies to plan your personal finance. We all insure the car, auto as we find them dearer than family or one’s own life. To invest in a good insurance scheme and to review periodically to ensure whether it meets your family needs is the best gift to yourself and family. An investment in insurance not only helps in financially but also supports morally and psychologically in critical medical conditions. It saves time and efforts. Insurance is the best investment and expression to show how much you care for your family.

Credit Score-

First thing to remember that do not pay late bills and ruin your credit score. A proper and constant credit score helps in almost any type of financing.

The right personal financial strategy helps you to keep your expenditure and savings in balance. It makes sure that your money is on the right track. The financial plan guides you in three crucial financial principles, i.e., Priority, Assessment, and Restraint. The financial strategy helps you to be successful in your financial goals related to your career, business, and family.


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