A financial plan seeks to identify our financial goals, prioritise them, and then outline the exact steps that we need to take to achieve those goals. Be it buying a property, renovating a home, paying off your debt, saving for your children’s education, having a comfortable retirement, going on a dream vacation, or preparing for unforeseen emergencies, financial planning allows you to achieve all your financial goals.
I see financial planning as a systematic approach that helps you manage your money. This amazing plan covers all areas of budgeting, insurance, mortgages, investments, taxes, retirement, and estate planning. It identifies the financial stressors in your life, as well as possible risks and emergencies, and proposes solutions. A financial plan is unique to every individual. They cater to everyone’s needs and desires. Your plan should tell your own story and connect the dots of getting you from where you currently are on your personal finance journey, to where you aspire to be when you achieve financial independence.
Creating a financial plan can be time-consuming and may require you to face up to some financial realities that you have been avoiding, but it's worth it in the end. A good financial plan has the following 8 components: financial goals, net worth statement, budget and cash flow planning, debt management plan, retirement plan, emergency funds, insurance coverage, and estate plan. Financial Planners can help you with your financial planning should you choose to explore their services. Once your plan is complete, you can begin taking specific steps to ensure that your finances are in order and running smoothly. You can then live a peaceful life with fewer surprises.
If you ask me the questions “who should have a plan and when to have a plan?” I will say ‘EVERYONE’, and the planning should be done ‘AS SOON AS POSSIBLE’. If we fail to plan, we are planning to fail. A lack of financial planning means a lack of focus. And anyone who lacks focus when money is concerned is vulnerable to making financial mistakes.
About Nike
Oyenike Adetoye (aka Nike) is an impactful speaker, author, and personal finance expert. A Chartered Management Accountant by profession. Nike is the founder and CEO of LifTED Finance, a private financial firm that educates, coaches and supports people on their journey through financial fitness and wealth management.