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No one knows what the future will bring. But planning and organizing your
financial affairs will help you prepare for many of life’s uncertainties.
What is a financial plan?
When you’re putting your financial house in order, it’s best to start with a
plan. In simple terms, a financial plan outlines the way that you intend to use
your money to achieve your short-term and long-term life goals. It’s like a
financial roadmap that will take you from where you are now to where you want to
be in the future.
Why is financial planning important?
Financial planning helps you stay in control of your financial future by making
the most of your money at every stage in your life. A financial plan is not just
for rich people and you don’t have to be wealthy to have one. Everyone can
benefit from financial planning. And it’s never too late to get started!
A financial plan will help you to:
| • | save money to reach your personal
goals
| | • | grow your assets over your lifetime
| | • | protect your assets as they grow
| | • | manage your taxes
| | • | prepare for unexpected emergencies
| | • | plan for your retirement
| | • | leave a legacy for your family
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Start with a simple plan
Your financial circumstances and personal goals will change over your lifetime,
so your financial plan should change, too. An easy way to get started is to list
your goals and create a basic budget or spending plan. Over time, you can expand
your financial plan to include investment strategies, tax and education planning
and other financial targets. Your goal should be to balance your day-to-day
financial priorities with your longer-term financial goals.
A comprehensive financial plan usually includes:
Keep accurate records
| • | Creating a
personal and financial records file is one of the most basic and
important steps in financial planning.
| | • | This file should contain detailed
information about you, your life and your finances and should include the
location of important documents. You should update these records regularly
to keep the information current.
| | • | Make sure that a family member or
friend knows where you keep your personal record and financial file, in case
of an emergency.
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Implement and review
Once you have your financial plan in place, it’s time to implement it. You may
not be able to do everything at once, but try to make as much progress as you
can. Each step along the way will take you closer to achieving your goals.
Review your plan at least once a year to make sure it’s still meeting your
needs.
Financial planning requires a time commitment and can be difficult to fit into a
busy schedule. But it’s worth the extra effort – consider it an investment in
your future and the future of your family!
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