BENEFITS OF FINANCIAL PLANNING

There are several benefits of financial planning that

result directly from having a financial plan. From
emotional and health benefits to social and financial
benefits, financial planning can positively influence on
all aspects of a person’s life.
There are dozen advantages but the following are some of
the most significant benefits of developing a financial
plan:
 Financial planning assists a person in setting and
reaching goals.
 Financial planning is an excellent source of
motivation and determination.
 Financial plans serve as a roadmap for decision-
making.
 Financial planning also provides emotional and mental
health benefits.
 It has been shown that financial planning improves
financial stability.
Going further into each of them, a person will gain a
better grasp of the benefits of financial planning and
the influence it may have on a person's life.

Benefit 1. Financial planning assists a person in

setting and reaching goals.
-Financial planning empowers individuals to establish
and pursue objectives, thereby providing them with a
sense of direction and purpose in life. Clear and well-
defined goals serve as a focal point, enabling
individuals to concentrate their efforts.
It's noteworthy that individuals actively pursuing clear
goals are approximately ten times more likely to achieve
success, a remarkable statistic that should serve as a
compelling incentive to start making a financial plan.

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Financial goals are pivotal for ensuring a stable and
fulfilling life, as personal finances play a crucial
role in achieving one's most cherished life aspirations.
Striking a balance between short-term, and long-term
financial objectives is utmost important.
Consider the following recommendations for formulating
and attaining balanced financial goals:
 Customize Goals: Ensure that goals are tailored to
the desired lifestyle and personal circumstances.
 Informed Goal Setting: Gaining a comprehensive
understanding of the financial aspects required for a
person’s financial stability is important. Conducting
thorough research and due diligence during goal
setting is crucial.
 Regular Goal Assessment: Frequent goal assessment
significantly enhances the likelihood of achievement,
as it keeps goals at the forefront of one's mind.
This aligns with the principle that what we
consistently focus on.
 SMART Goal Framework: Define objectives with
Specific, Measurable, Achievable, Relevant, and Time-
bound in mind.
 Visualization of Goals: Employ the powerful technique
of visualizing financial objectives daily to build
momentum towards realizing them. This approach, akin
to how Michael Jordan mentally rehearsed his shots
before executing them in games, can be highly
effective.
 Align Goals with Values: Aligning goals with core
values provides a stronger motivation for its
attainment. When goals are driven by a compelling
"why," a person will more likely to find ways to make
it a reality.

 Benefit 2. Financial planning is an excellent source

of motivation and determination.
-Individuals often struggle to find motivation when they
lack clear objectives and an understanding of what is

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 expected of them. The presence of a financial plan
diminishes uncertainty surrounding financial matters by
providing a clear path and outlining expected
achievements. This clarity increases the likelihood of
individuals actively pursuing their goals.
When one possesses a well-defined action plan through
their financial strategy, it eliminates the ambiguity
that can cloud judgment. When individuals are prepared
to instigate positive life changes, having a plan
minimizes hesitancy and promotes prompt action, leading
to higher levels of follow-through. Procrastination can
diminish the likelihood of taking action, underscoring
the importance of having a financial plan, a compelling
"why" behind it, and simplified goal attainment methods
to maintain motivation and commitment.

Benefit 3. Financial plans serve as a roadmap for

decision-making.

- Financial plans play a pivotal role in guiding actions

toward desired outcomes.

When individuals coordinate their actions and

concentrate on specific objectives, they become
considerably more effective.Taking action on financial
decisions can be daunting for various reasons, often
stemming from the stress and stigma surrounding money
that discourages people from discussing or thinking
about it. The complexity of personal finance terminology
further compounds the issue, particularly when coupled
with the gravity of financial choices, which can have
long-lasting repercussions, both positive and negative.
Given the multifaceted nature of personal finances and
the multitude of available options, making informed
financial decisions can be challenging. A well-
structured financial plan can alleviate this complexity
by outlining clear and actionable steps to position
oneself favorably. Having a trusted expert delineate
these necessary actions instills confidence and
facilitates effective implementation.

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 Benefit 4. Financial planning also provides emotional
and mental health benefits.
-The presence of a comprehensive financial planning
yields emotional and mental health advantages.
Individuals who have such a plan experience reduced
stress levels and a more optimistic outlook on their
future when compared to those without one.
The act of having a readily accessible financial plan
fosters greater mindfulness about personal finances,
subsequently diminishing stress related to money
matters. With a plan in place, individuals are better
equipped to overcome setbacks.
Notably, a recent survey revealed that 83 percent of
individuals who possess a documented financial plan
reported an improved sense of financial well-being
within just one year.
Furthermore, positive changes in one aspect of an
individual's life often have a ripple effect on other
areas. Therefore, a written financial plan not only
enhances financial stability but can also contribute to
overall health and well-being.

Benefit 5. Financial planning improves financial

stability.
-A financial plan raises your level of living by
lowering your tax burden, making wise investments,
keeping track of your spending, and building your
wealth. It promotes responsible spending, which leads to
a brighter future for yourself and your loved ones.

Current issue:

Lack of financial planning literacy of Filipinos:

Poor financial management has several ramifications. One
of these is a lack of capacity to save. You won't be
able to save for retirement or even a normal savings
account if you spend recklessly. Unexpected catastrophes

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occur in life, and if you do not have rainy-day money,
you may lose your house and your way of life. In the
worst-case situation, you may be compelled to live with
your adult children or rely on the generosity of your
friends.
To address the lack of financial planning literacy,
comprehensive educational initiatives must be
implemented at schools. Schools should incorporate
financial literacy into their curricular, teaching
students the fundamentals of budgeting, saving,
investing, and debt management from an early age.
Additionally, community-based workshops and online
resources should be readily accessible to adults,
providing practical guidance on financial planning,
including retirement planning, emergency funds, and
long-term financial goals. Encouraging open discussions
about money matters within families and fostering a
culture of saving and responsible financial decision-
making can further help bridge the gap in financial
planning literacy.

Refferences:
https://savology.com/6-benefits-of-financial-planning
Current issue refference:
https://www.linkedin.com/pulse/consequences-poor-money-
management-james-mirara