Depending on where you are in your career, someone has probably told you that you should have a financial plan. They may not have told you why you should have a financial plan other than that it will help you in the long run. Having a financial plan is, in fact, beneficial to people at all stages of their career. Regardless of if you are twenty years from retirement or two years, it would still benefit you to have a plan.
When making any plan, you more than likely find yourself taking two items into account: time and finances. A financial plan is no different; it should be based on your short-term and long-term goals and how much it could cost to reach those goals. Many of us have the same long-term goal of Financial Independence (AKA Retirement), but our short-term goals may vary based on what stage of life we are in. Therefore, your financial plan will not only evolve with you, but it will also be a roadmap for you to work towards achieving Financial Independence.
Still not sure that you need a financial plan? Are you planning for any of the following life events?
- Building your emergency savings
- Saving for your first home
- Considering a vacation home
- Close to your Financial Independence (retirement)
If you are planning for any of these events, you will want to make sure that they are all in your financial plan. There is no time better than today to start to plan for tomorrow!