If you don’t know where you are going, how will you know how to get there?
In financial planning, whether for the short or long term, it is imperative to develop a plan in order to ensure your success. Knowing what you want is of little use without the understanding of how to attain it.
A personal financial strategy will provide you with a roadmap that identifies what you need to do to achieve your financial goals and aspirations. Having this roadmap will help you make more informed decisions about what you spend, save, or invest. How important is making “more informed” decisions to you?
Beyond a sense of security and freedom, good financial planning is really intended to help mitigate the three risks we all face in life:
- outliving our money (living 'too long'),
- dying 'too soon' (being unable to provide for and protect our loved ones),
- the vicissitudes of life (sickness, disability, job loss, etc).