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Financial Planning - Is It Necessary?

Give me five `good reasons for doing financial planning.

1. You need to work out a way to gather the wealth you want

2. You need some basic security for yourself and your family, which means know that you have a predictable income and a certain amount of emergency funds if your income should temporarily disappear for one reason or another

3. To give your children the best education possible: The best schools providing higher education are normally the most expensive.

4. Be able to do things or travel to places you always have dreamed of not only after you have retired (you may not live that long) but also when you are relatively young.

5. Be sure that you don't use more money than you earn

These were just a few examples. I could find many other arguments for financial planning.

There is a good case for starting some financial retirement planning while you are still young. There has been a lot of news recently about pension funds going bust, and leaving their investors with nothing; so it is only natural that you should try and find another solution to your future retirement.

There are many people who can advise you, from bankers and brokers to independent financial planning advisors. Financial retirement planning is not like planning what you will do with all your free time: in fact, there is a lot less dreaming and a lot more financial planning work.

The first aspect of financial planning should be where you are now in terms of money. Do you owe a lot, or are you bothered by the amounts that seem to go adrift from your budget? Clear these up before you begin your financial retirement planning.

Most financial plans are bound up with the future, and you need to consider how much you think your costs will go up by each year, and adjust the amount you will need to fit in with this. For example something that is 20 years in the future may rise by as much as 300%. Take this into account when doing your financial planning, as otherwise you may end up short of your goals.

Start planning your goals as early as you can. Financial planning at the last minute is never going to work. Before you start planning, you should look at the financial retirement planning of others in a similar job and with a similar pay scale.

You should also be aware of what your benefits are, and what you could be offered. Remember, living costs will not diminish during retirement, so you will need to save as much for each year as you are currently spending.

Ian Koch is a sociologist and web publisher who writes various Self Help Articles . Check out for more.

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