Financial planning is exactly as it sounds – it’s planning your finances. It’s an ongoing process which can help you achieve any long-term goals you may have, such as planning for retirement, while still supporting your short-term needs. Personal financial planning can help you achieve goals, lower stress and manage your money. But it’s often the last thing on our minds.
Why aren’t we planning ahead? It’s our human nature to want everything now. When it comes to our finances, it’s so tempting to have it all today – we just can’t seem to help ourselves. Get the reward now rather than later. Choose immediate gratification over long-term satisfaction. It’s how we’re wired. And as much as we can try to evolve to think more long-term, there are also the cultural influences to consider.
Temptation to spend is everywhere. Millennials are a good example of a ‘have it now’ generation. Born between 1980 and 2000, they are the first generation of digital natives, with access to all the information they need. On one hand, they have a world of financial information, education and advice at their fingertips. And on the other, they may feel pressure to compare and compete with what they see on social media:
Following the global financial crisis – a time of low wages and very low interest rates – it’s easy to see how this generation could be swayed to spend, rather than save. And they’re not the only ones.
Our excuses hold us back, financially. It’s not a lack of education, information or professional advice that holds us back – it’s us. We find it difficult to share our thoughts and worries about money. It’s easy to lose perspective and develop a skewed view of our finances. For example, you may feel:
It can be easier to believe our own excuses rather than change the way we think.
The benefits of financial planning
It’s good to talk. There are many benefits that come with talking about money, engaging with your long-term finances and planning your financial future. And we’re not just talking financial benefits, there are personal wellbeing benefits too. It can help you:
Achieve your goals
Once you stop worrying about keeping up with everyone else’s life goals, you can focus on your own. From holiday adventures to a new business endeavour – once you know what you want, you can put a financial plan in place to make it happen.
Reduce stress and anxiety
When you bottle something up, it can cause a lot of stress and anxiety over time. Especially, when it’s to do with your finances. Many people feel this way – you’re not alone. No matter what your financial situation looks like, support is available. And talking to someone you trust can help you take action and feel more confident.
Learn from others
There are all sorts of saving and investing tips out there. The more you talk about money matters, the more opportunities you’ll have to share with, and learn from, others.
Personal financial planning works by creating a step-by-step guide to manage your money and reach your financial goals. It can help you identify where you want to be in life with regards to your money, and how you can potentially get there. Financial planning could help you feel more in control of your income and outgoings, as well as any investments you may have.
A financial health check can give you a view of your finances, and see where you could potentially make changes.
Financial planning tools
1. Use online calculators to work out your options
Easy to access and free to use, you’ll find online calculators for everything, from savings and investments to interest rates and retirement planning retirement planning .
Great for: quickly working out your options.
2. Create your own financial action plan
Creating an action plan can make your financial life clearer and simpler. It will help you work out what your money is doing for you right now, and how you could make it work harder for you in the future.
Great for: serious peace of mind.
3. Get some financial advice
If you’re not sure how and where to invest your money, a trusted financial adviser could be a great place to start.
Great for: confidence and support.
© 2024 Caravel Partners (Zambia) Ltd | Caravel Partners (Zambia) Ltd and Caravel Partners (Uganda) Ltd. are wholly owned by Caravel Partners Ltd., registered in the Seychelles with reg number 238002.
Caravel Partners (Zambia) Ltd is licensed by the SEC in Zambia - License No. IARL/23/118