The Benefits of Financial Planning

A financial plan can help you with the following things:

Assess your financial situation by helping you track income and expenses, establish an emergency fund, and determine your overall net worth and to see where you spend the money, where does the money come from and where you need to save more money!

Save for major expenses like funding a child’s education, buying a house or car, or developing a cash reserve for special occasions like weddings and vacations. Open a savings account and put every month a percentage of what you earn to the account. Never skip this step, resist the temptation.

Plan for your retirement by estimating your retirement income and expenses and the value of government programs. Then you can begin to determine the amount you need to save to meet your retirement goals. Use a computer software to do this for you. Don’t trust the pen and the paper since you can’t know with exact precision if you use this method. Always use the computer.

Assess your risk tolerance and develop an asset allocation strategy, talk to a money expert and he will guide you making your investments and telling you where you shoul invest right now to make the most!

Plan to reduce your taxes, project the effect of income taxes, and develop a tax-deferred strategy, make a search on Yahoo for saving taxes, lot’s of info here telling you how to save money on taxes. Most of the time you can pay 20% less. That’s a lot of money!

Protect you and your family against financial crisis should you become disabled or die. Get a life insurance policy. It’s is worth all the money you soend on it.

Plan your estate to ensure your assets are distributed the way you desire, fund estate taxes, and minimize their effects where possible. Use Microsoft Money for this one. Try it for 60 days and then decide if you should buy it or not.

Getting a personal or company pension forecast you can ask your pension provider for a forecast of what your pension will pay when you retire. The pension provider may be your employer if you contribute to a company (occupational) pension scheme, or your personal pension provider.

Your pension provider will regularly send you certain information, for example every month or an annual statement of your pension fund’s value. This should include a forecast of your pension income at retirement age. The information is priceless.

This way you can know how much money you will have when you retire.