Why Make Plan for your Personal Finance?
There are a lot of factors that we need to manage in order to sustain or even improve our life standards. One of them is the financial factor.
Talking about financial factor, it is highly related to money. We need money for a lot of things in this world, food, transportation, house, entertainment, etc.
When do we need money? As soon as we born in this world, there is money spent for the hospital, doctors, baby milk, clothing, etc. So, starting from age 0 to the end of our life in this world, we will still spend money to fulfill our needs. Even after we pass away, our family will still need to spend money for our burial. Even worse, some people not only pass away from this world, but also pass down their uncleared debts to their beloved family (oh no!) because of inadequate financial planning.
Ah don't we forgot to discuss that aside from spending money actually we earn money also? Yes. Typically someone will start having their job and start "making" money on their early 20s. This is the point where man/woman accumulates their money, then get a nice car, buy their first house, even marry their loved ones. Till some point in their 50s, lets say 55, where they will retire and stop earning lots of money from their professional job. So typically, that's about 35 productive years where someone can earn lots of money. Then after that, the spending of money goes on for lets say age 75, so another 20 years. How would they fulfill the financial needs in these "extra" 20 years while they are not productive anymore? Plus old individuals is more prone to sickness or disease. If they fall sick, where do the money to cover their healthcare comes from?
Or what happen if someone got permanent disability in their productive age? how would they accumulate enough money to sustain the rest of their life?
Or what happen to someone's debt if they happen to pass away in their productive age? Who will take the burden of paying these debts? family? do they able to?
A good financial Planning is needed to tackle these situations.
This is just one example of why personal financial planning is necessary. Next we will discuss in more detail what needs to be planned in making a personal financial plan.
This is just one example of why personal financial planning is necessary. Next we will discuss in more detail what needs to be planned in making a personal financial plan.
