Before we get into that, let’s discuss why there is a need to plan financially in the first place.
Why bother to Plan?
That’s probably one of the most common thoughts that will creep into our minds when the topic of financial planning comes up, wouldn’t you agree?After all, my parents didn’t plan and they came out fine after all. So can’t we just live life as we please and use the money for present enjoyment now…and yes, there’s so many avenues I can use the money for and surely, I can probably derive much greater pleasure than placing it into SOME FINANCIAL PLAN?
Well, that may seem logical on the surface but if we go deeper, we would probably understand the various reasons why proper financial planning is important to us and our loved ones. Think about it, if things do go wrong and if we are unprepared for it, what’s our fallback plan?
Read on if you do not have a concrete reply to that.
Let’s examine the importance of financial planning :-
- Unlike certain western countries that have generous social and welfare schemes in exchange for high wage taxes, Singapore is quite the opposite.
- Hence, It’s our personal responsibility to direct our tax savings towards plans that will benefit our long term well being. The issue with that however, is that people may not plan or plan inadequately.
- Do I have sufficient reserves in times of contingencies such as loss of job or family emergencies?
- What should I avoid spending my money on?
- How will this car or home purchase affect my cashflow?
- How can I better manage my expenditure and save more?
- How to get out of debt?
- What will happen to my family if I died yesterday?
- If I do not die but become critically ill or disabled, how will I continue to support myself and my family should I lose my income as a result?
- Where will the funds come from? How much is sufficient? How long will it last?
- Will I be forced to sell my car, downgrade my house and borrow money from my friends and relatives?
- Being an anxious parent, providing my child with the best education he/she deserves is the best thing I could provide in view of the competitive society we live in
- How much funds do I need to prepare and by when?
- What will become of my child’s future if my funds fall short?
- When can I expect to work because I WISH to, and not because I HAVE to?
- How and when can I become debt free?
- How long are my retirement years and what retirement lifestyle do I desire?
- Will my money last through my retirement years?
- How can I best accumulate and manage my money?
- How much time do I have left to accumulate before my retirement age?
- How can I lower my taxes as my salary rise?
- How can I ensure that my estate will be distributed according to my wishes?
- If my children are still minors at the time of my death, who will take care of them? How can I ensure that my estate will be best managed for their benefit?
- Will my parents and siblings benefit from my estate should I die without a will?
If your head is spinning after reading all that, good news is, you’re not alone.
With so many financial aspects to look into, where do I start? How do I go about doing it?
Well, that’s where comprehensive financial planning will come into good use.
Article from Gilbert Koh on Overcoming the Tsunamis in your Life
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