Financial planning is a huge topic—so much so that it's something many people avoid thinking about until they reach a point where they really need to. Creating a financial plan is often left until someone starts a family of their own so they can ensure their children are well cared for and their spouse won't be left in difficulty if anything unexpected happens.
Although it's quite common to do this, it's a bad idea. Starting as early as possible—preferably as soon as you begin your career—gives you plenty of benefits, so sit down today and start thinking about your financial future.
You'll be ready for emergencies
When you start your financial planning, one of the things you should factor in is the possibility of being without work for a time. Even if it seems incredibly unlikely, working out how much you can save towards an emergency fund gives you total peace of mind that you'll be fine if the worst does happen. It's also helpful for other unexpected events, like medical care, home damage, or needing to move to a new city on short notice.
Your plans could change suddenly
You might not have plans to settle down and start a family anytime soon, but that can change quickly and unexpectedly. Just a little extra saved each month on top of your emergency fund helps set you up well when this is something you want.
Maybe you also think you won't be able to buy property in the near future because it feels out of reach. Getting a solid financial plan together could surprise you, however, and it's entirely possible you work out a way to save towards your own home sooner than you think.
It helps you work out what you want
Few young people take the time to sit down and plan out their life goals, either short-term or in the more distant future. Financial planning goes beyond money, helping you see what it is you want to achieve and when you want to get there.
Retirement will come sooner than you think
When you're in the early stages of your career, retirement is probably at the bottom of your list of priorities. But life passes quickly, and the sooner you start planning for your later years, the better the position you'll be in. Small amounts really do add up over time, so work out what you can comfortably afford to put aside for retirement and reap the benefits later.
There are benefits along the way
Your financial plan doesn't have to be all about families, retirement and buying a house. It also helps you find ways to save for more fun things you'd like to buy, like holidays and expensive gadgets. As long as you stay sensible and get your priorities right, you can benefit from your planning and careful saving while you're still young.
Share21 August 2018
I've had an interest in personal finance since my mother took me to open my first bank account when I was six. I realised then that you can decide how to use your money and make it work for you. Over the years, I've read extensively on the subject of personal finance and attended conferences and events focussed on teaching you how to use your money wisely to achieve your financial and lifestyle goals. I started this blog to share what I've learned on my personal journey with money, and I post about a variety of topics, such as the power of compound interest and when getting a credit card can be a smart decision. I hope you find my blog useful.