The Importance of Financial Planning during Times of Economic Instability

The Importance of Financial Planning during Times of Economic Instability

Over the past few years, the entire world experienced serious financial shakes. These affected millions of people and got many to wonder about their financial future. Are you one of these individuals? Giving financial planning a try right now is probably one of the best options for managing your money and making the most of it.

Financial planning refers to putting together a financial plan on the basis of your current condition, your investment needs and your plans for the future.

This process is usually managed by a financial consultant, a tax specialist or a professional financial planner. The final goal of the evaluation is to determine the investor’s capabilities and figure out whether these are sufficient to realize a future goal.

Why Financial Planning is so Crucial in Times of Economic Hardship Having a secure financial future will require a lot of hard work, especially if the economy or a particular industry are showing signs of instability. For most people, investment is a long term goal. They want to buy a house in the future or they want to enjoy their retirement years. Leaving fund management to chance will never result in the wealth required for these goals.

Through financial planning, risks are assessed and factored in the equation. The consultant comes up with a course of action and specific steps that will ensure profitability in the long run and decrease the risk of financial losses significantly. By coming up with a worst-case scenario, the analyst can prepare a client for economic crises and other extraordinary events that may diminish investment returns.

How is Financial Planning done? Financial planning incorporates five key components: Budgeting, Debt management, Savings management, Investment and future goal planning. All of these are needed to maintain financial health, especially during harsh periods.

This kind of planning gives some security and stability. There are saving reserves and the right kinds of investment that will continue bringing money in the years to come. Spending a bit on professional assistance can actually help you save a lot of money and prevent a serious disaster in the long run.

Having realistic goals and understanding social, economic and employment influences will both be important for sound investment. A professional has the most unbiased and realistic view on the situation, which is why doing professional financial planning can be so beneficial in the long run.

About the Author

Charl Oosthuizen
Independent Financial Advisor / Onafhanklike Finasiële Adviseur Ultrafin Finansiële Oplossings (Edms) Bpk / Financial Solutions (Pty) Ltd FSP 35757 Cell: 083 377 1441 | Fax: 086 617 8137 | Tel: 086 111 4602 Besturende Direkteur. Charl is sedert 1990 betrokke by versekring. Verantwoordelik vir oorhoofse bestuur van maatskappy, met spesifieke fokus op die Kort Termyn Afdeling as ‘n boer in murg en been lê die landbou vir Charl baie na aan die hart. Dus vorm Agri Versekring en gepaardgaande NIS produkte ‘n belangrike deel van Ultrafin se Potefeulje.

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