While navigating through the process of attaining financial freedom, it can be somewhat overwhelming to find what is the best course of action. For many years financial planning has spearheaded efforts to grow and preserve wealth, and it can do the same for you. Here are some of the benefits of financial investment planning. Initially, personal financial planning can accelerate your savings. A financial plan is created in order to keep you accountable. Let’s say you want to save “x” amount for your future retirement savings, but how exactly will you get there? Through personal financial planning, you asses aspects of your finances like income and expenses. Once you break down your finances and truly see the things you spend money on and what you can cut out, you can accelerate your savings. With the help of a personal financial plan, you have the opportunity to find out what your larges expenses are and how to work with them. For example, say you break down your income and expenses and see that you spend around $300/month on restaurant take-out. With that new found information, you can now cut back on that spending and divert it to your savings and in turn, grow your own savings. All you had to do was cut out Friday night Pad Thai.
Another benefit of financial planning is that it instills confidence. Not only does it instill confidence within your finances, but also in you personally. When you know where your money is going and you know that it is growing for your future personal gain, you can walk a little taller. Although savings accounts and investments come with some potential risk, you as an account holder knows that your money is going to the right place and not being spent on frivolous things. You also gain a confidence just by knowing that you are capable of handling an unexpected financial hardship. Things in life are always unpredictable and without money in savings, you could end up having to spend money that you don’t have just to cover an expense. You have somewhat of that peace of mind knowing that your financial investments are working for you and can cover an expense if need-be.
Additionally, a financial investment plan can potentially save you money on taxes. Depending on your financial investment goals, a financial advisor can put you on a path that saves you money on taxes. For instance, let’s say that you want to devise a financial plan in order to invest in your retirement fund. With the analyzation of your individual circumstance and income, a financial advisor can potentially find you a retirement account that is tax-free. As a result, you can spend less money on Uncle Sam and more money on your financial goals.
Financial investment planning also will keep you ahead of inflation. As we all know, inflation is inevitable and something we can count on to shift over time. With the help of a financial advisor, you can find secure ways to invest your money. When your money is invested in things like stocks, bonds, property, etc., you are securing investments that should appreciate over time. Therefore, you and your investments will be ahead of inflation.
Lastly, another great benefit of financial investment planning is that it helps you meet other financial goals. Devising a plan to achieve a future financial goal is a great step in the right direction. Once you have that plan in place and you are taking the necessary steps in order to achieve that goal, it becomes increasingly easier to pursue other financial goals as well. Perhaps your initial financial goal was to save up money in order to purchase a home down the line. Once you achieve that financial goal, you are hardwired into knowing how to save. You can keep up that savings and maybe work towards your retirement fund, or maybe a savings fund for your wedding. Regardless of your specific financial goals, creating and following a financial investment plan can put you on the right path in obtaining financial freedom and give you access to the life you’ve always wanted.