PERSONAL FINANCIAL MANAGEMENT

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''Those who fail to plan, plan to fail''. the popular saying goes. In the increasingly unpredictable world that we live in, the need for people to plan their life, family, finances, retirement and estate cannot be overemphasized. I would be discussing on financial planning as it relates to individuals.

WHAT IS PERSONAL FINANCIAL PLANNING?(PFP)

As the name implies, personal Financial Planning is planning for a person or family, as opposed to companies or corporations. It is a process of ensuring that you match your resources with your obligations in order to meet your financial objectives. It's a conscious/deliberate effort aimed at achieving financial security by continuously and consistently growing your assets and watching your expenses.

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Virtually everybody needs personal financial planning and in the bid to attain certain basic financial goals. People fall for a variety of financial instruments such as investments, insurance, retirements plan, savings plan etc. However personal financial management must have the total process of developing and implementing a coordinated and consistent plan for achieving one's financial objectives.

Financial security is achieved when your income is enough to take care of your obligations comfortably without any need to continue working.

THE NEED FOR PERSONAL FINANCIAL PLANNING:

Some of the reasons that make personal financial planning imperative are: the need to know ones financial worth, identify and convert dormant assets into productive ones, enable one have peace of mind and there by be more reproductive, be clear headed enough to see and utilize emerging opportunities, live a relative happier life, allow better management of personal life threats such as ill health and premature deaths, be in a position to retire in comfort and also give something back to dependants and the society.

Given the reason why everyone should have a personal financial plan, you begin to wonder why so many people fail to do so. Some of the reasons may be identified below:

• Ignorance: Most of the people just don't know better.
• Some may know that there's a need but they are not sure of what to do.
• Some cannot be bothered as they think it's too much work.
• Some people believe they earn too little to plan on, and some think they would lose their spending freedom.
• Most people are plainly religious.

STEPS TO PERSONAL FINANCIAL HEALTH:

• Have a desire and discipline to begin.
• Take a financial health assessment check.
• Gather information about your assets and liabilities.
• Analyse the information.
• Determine your current financial situation.
• Set financial goals.
• Start a saving plan and be consistent.
• Reactivate your dormant assets.
• Budget your spending and stick to your budget.
• Record all your expenses in a log book daily.
• Monitor your expenses.
• Review your plan periodically.
  In summary, your efforts at personal financial planning can be viewed under
• Making money.
• Paying you first,i.e saving automatically and consistently.
• Investing your savings.
• Budgeting(planning) your spending.

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Wisdom is knowing what to do next, skill is knowing how to do it and virtue is actually doing it. Be wise, skilled and virtuous.

Thanks for reading.......

I remain your humble @joanna-godfrey........