Importance of Proper Financial Planning

Before you were hardly concerned with financial planning and management but as you grow old and you start earning money, you begin thinking about life insurance and mortgages [], and other financial matters. This is probably because now that you are working, you already realise the value of money and the significance of handling it effectively.

Financial planning is one of the keys towards success as this involves being financially prepared for the things that will come into your life. For one, you will plan to save money for your dream house and lot, plan to invest money on a business or any other investment scheme, and plan to put your money in a safe place where it will grow significantly.

But aside from planning what things to buy or where to put your money in the future, you also need to be financially prepared for unexpected things that may hit you by surprise. Circumstances such as sickness, disability, accident, death or natural calamities are all possible to happen at any point in your life, and any of these may have adverse effects on your life.

For instance, if you get sick, you will lose a great deal of your savings because of the expensive cost of hospitalisation and medical treatment. This savings, which you were planning to use for future investment would be depleted. This would affect the course of your plans.

Aside from that, because of your poor health, you will be unable to perform your job effectively. You will have to take a sick leave, be absent, or worse, be fired from your work. This will be detrimental for you because you would not have any source of income to get by your day-to-day necessities and to fulfill your monthly obligations especially if you have any loans or mortgages.

But if you see to it that you are financially secure, you will not to worry about such things. One good way of doing so is by taking out the necessary insurance suitable for your lifestyle. An income protection policy for example will prove to be crucial in times of unemployment. It is the same with a mortgage protection policy, which will help you fulfill mortgage obligations in the event that you lose your job or your ability to work due to poor health or disability.

It is true that taking out insurance is an integral part of financial planning. Because of this, you need to plan and decide which ones you need. An insurance broker can help and guide you in this process. It is possible that you are not familiar about the insurance industry so a broker can help you make an informed decision regarding which products to take and what insurance companies to rely on.

Taking out insurance will help you be financially secured. With the right insurance on your back, you do not have to worry much about unexpected events that may otherwise leave you off track and problematic.

Personal financial planning: Tips to control and get rid of debt

In case people find themselves sinking deeper into debts, it is time for them to sit up and take charge of the situation in order to tame the menace before it causes irrevocable damage. They should be aware of their disposable income and keep track of their spending. There are many who are earnestly seeking answers to their queries regarding how to eliminate debt .As a reply to their queries, this article has been composed to comprehensively discuss few strategies that will help them to resolve their debt problems.
Debt elimination strategies
Debtors may follow the below mentioned strategies in order to control their debt and repay them easily:
1) Arrange all the debts – Debtors have to make a list of all the financial obligations that have been bothering them. They must include all the details of every creditor in the list. For instance, name, address, phone number, type of loan, rate of interest, outstanding balance to be repaid, etc should be there in the list.
2) Use of online resources – Debtors can take advantage of the free personal financial planning calculators and software to develop a well crafted budget and a debt repayment plan. This will help them to keep an eye on their expenditures and stop increasing the debt amount further.
3) Build an emergency fund – An integral part of the debt elimination plan that can help people eliminate debt is to build an emergency fund. This will protect their finances during rainy days that may wreak havoc on their already weakened financial health. Moreover, it will also shift their dependency on the credit cards. For that reason, debtors can have a certificate of deposit account that is more useful than savings accounts to meet the objective of having an emergency fund.
4) Pay off expensive debts – This strategy will help debtors to repay the debts that have been brought with high rate of interest. As a result, it will save them a lot of money by quickening up debt repayments and making the least interest payments. However, they can also start off with repaying the most minimal outstanding balance first and gradually moving higher up the ladder.
5) Aggressive debt repayment approach – According some debt experts, debtors must pursue their goal of becoming debt free with a renewed vengeance and determination. In all, they should be aggressively following their self-crafted debt repayment plan and budget. This is because while going through the budget, they must keep in their mind that every dollar is crucial for them. Debtors must not forget that every penny saved is every penny earned that will help them to make extra debt payments.
Finally, debtors can speak to their creditors and, ask for some waivers on the penalty charges and some compromise on making the payments. However, before approaching them debtors must have a clear repayment plan and an indomitable urge to pay off all the outstanding balance so as to convince the creditors for the same.