The Importance of Financial Planning

Throughout life we a faced with financial decisions. Much of the time we are unable to manage our funds the way that we would have liked. Successful financial planning allows you to have a clear prospective on your future financial needs. In order to gain the financial freedom of your desire you will need to start by reviewing your current situation. Like many others my finances are not what I?d like them to be. With everyday that passes I ask myself questions like , ? what if I lost my income ?. These are one of the many ? what if ? questions that I think of when I am managing my finances. I know that I must be prepared for anything that may happen to my financial status.

In order for me to figure out what my financial status is, I must first determine my financial situation. I need to keep in mind of any defined goals that I may have. Goals are great as long as I can provide for them. Reviewing how much money I have in assets and belongings gives me a better idea of how much money I am worth. Knowing when and how to spend and save is essential when planning your finances. Taking full responsibility for all of my financial decisions is the beginning of financial freedom. To know exactly how much money I am worth I must get into the details of my belongings and income. I know that I have a boat that is worth about three thousand dollars I also have three vehicles that are worth about two thousand dollars a piece. Now that I know how much money in assets that I have I need to figure out what my annual income is. Measuring the amount of money I earn and spend every year gives me a better idea on how to manage my funds. My annual earned income is about fifty thousand dollars a year. This is money that I earned from my employer in a one year period. You can also generate income with investments. Although I do not have any investments at this time, I know that I can invest my funds in the future to create a positive cash flow.

Now that I have determined how much money