How important is it that we plan our finances? The world is constantly changing, including economic. Therefore, we manage to plan our finances, whether they are planned for use each month. Plan to use emergency response in the future for today’s changing society. It doesn’t affect our finances much.
But some people may still be wondering why we need a financial plan. There’s no problem right now. I’ll think about it later. If you think that when the problem actually comes in, you can solve it poorly, possibly leaving a huge debt. Our article today will take everyone to understand why we need to plan our finances, which will be why.
What is a financial plan?
First, let’s understand what financial planning is. How important is it that we plan our finances? It is best to start by cultivating good savings and money habits to be disciplined as a child, because when you enter working age, you need to know how to plan and make enough money to spend your day. Therefore, financial planning is important so that you can continue each stage of your life well and have good financial health.
Why do we need a financial plan?
1. People who are longevity
Let’s start with the first point as to why we need financial planning, as our life expectancy tends to be more longevity and longevity. It means we need to plan a greater amount of finances as well to make it enough to live after retirement.
2. The structure of society has changed.
The next thing is that society has a changing structure, since the past was a large family where parents had ten children so that they could have children to raise when they were old, but nowadays the family is a smaller family. Parents have only 1 to 3 children. Expecting your child to take care of them can be difficult, so financial planning. Saving for retirement is important so that in the future there is no burden on children or others.
3. The cost of living in the future is higher.
With a changing society. The cost of living is also more likely. Inflation also causes the value of our money to decrease, so we need to spend more money, so financial planning should take into account inflation because the current value and future value are not the same.
4. Inadequate government welfare
In terms of public sector welfare towards the cost of living after retirement, both the allowance and pensions from the Social Security Fund are inadequate. Therefore, more financial planning is required in order to be able to have enough money to spend in the future.
5. Faster retirement
In terms of retirement, If we start financial planning faster, there will be a chance of retirement faster. Young people can retire so that we can do other things that we want to do a lot, whether it’s traveling or wanting to stay at home.
6. Supports more risks
In order to protect the wealthy, risk insurance in areas such as property insurance such as home, car, life insurance for family security, as well as accident insurance. A serious disease that could happen. If we plan to transfer these risks to the insurer, it can reduce the damage. Our financial losses have been enormous.
However, we have seen how important financial planning is and what benefits it will bring to us, which will ensure the stability of our future financial health. Whether it’s with ourselves or for our families, it reduces the risk of things and can be used in emergencies that may occur unexpectedly. So if we have a good financial plan, we won’t be tightly afraid of what will change in the future.