Have You Committed To A Personal Financial Plan?

How many times have you heard the adage that most people don't plan to fail, but that they often fail to plan? Few individuals purposely or at least consciously decide to avoid planning for their financial planning, but at the same time, many people never formally create their own financial plan, and even fewer actually commit to following that plan. Everyone has certain financial needs, and these include: planning for retirement; creating a funding source for a child's education; having a reserve for emergencies and/ or contingencies; having an opportunities fund, etc. While we all have different priorities and needs, goals, and aspirations, those that formally plan and then commit to their personal financial plan generally live a far less stressful and worried existence.


1. Retirement: Those who believe that Social Security will provide their major source of retirement funds are often devastated when they retire. While this program provides a safety net, with what goes on politically, no one can be absolutely certain in what form this might exist in the future, nor even when the official retirement age might be. Therefore, wise individuals plan by focusing on what they will need when they do retire, at least in present day dollars. Then they adjust that figure by an average inflation rate, and then determine what they need for their retirement needs. The best way to do this, for most individuals, is to, on regular and consistent basis, put away a regular dollar amount. Doing this, for example, on the same day each month, creates a habit of saving, is more easily achieved, and creates what is referred to as a dollar cost averaging (putting away the same amount on the same date every month, so that fluctuations become far less of a factor). Reliable mutual funds which diversify are generally a relatively easy way to do so. It is recommended that you speak to a professional financial planner or adviser or attorney who specializes in this area.
 
2. Children's Education: Do you really want to put your child into an enormous amount of debt before he even begins his work career? Doesn't it make sense to begin planning for this need when a child is very young, so that a systematic, periodic investment plan can significantly reduce this burden?

3. Emergencies, Contingencies, and Opportunities: Don't let something unexpected put you in a real bind! Rather, create your own emergencies and contingencies fund. Have you ever wished you had the resources to take advantage of a great opportunity, but had to pass on it because you didn't have the funds to do so? The solution is planning in an organized manner?

Like most aspects of our lives, those who plan meaningfully and act strategically end up with the best results. Would you rather plan to succeed and achieve your financial needs and goals, or would you prefer to merely fail to plan and let the chips fall where they may?