When is the right time for Financial Planning? My future is a long way away, why bother today?
The best time to review your financial situation is Today! And you must do this as regularly as you can because your life is never static.
Unless you start early, you might find that time has passed you by. You will get older, your children will have growing needs, your expenses will rise and, before you know it, you may be regretting not planning for the future. Don’t be complacent that you will be okay whatever happens.
Financial plans must be dynamic to reflect the changing socio-economic environment, as well as the stage of life that you are in. Yet, very few of us bother to review our financial situation as we move from one stage of life to another. We recommend that you review your financial plan at least once a year to take advantage of changing investment opportunities and risk.
Why should you do Financial Planning regularly?
Simply put, time never stands still. You grow old, your needs change, your family’s needs will also change. Additionally, the context around you will also change. There will be new investment opportunities. Some old investments that you would have made might no longer make sense with the passage of time or will need to get updated.
With the passage of time and your increasing age, your needs change. Similarly, due to economic, political and family reasons, the context can also change. Accordingly, you need to adjust and update your financial plan to take advantage of the new conditions as well as to react to changes.
Someone in their 20s will have different needs as they enter their 30s. Also, over this time period, your risk profile might have also changed (age-based financial planning).
Someone who is married with no children will have to update their plan when their child is born. As a start, if the person did not have any insurance, he or she must buy protection because the family size has increased. Also, this would be a good time to start thinking about writing a will to identify who your beneficiaries will be (life-stage based financial planning).
Go through stages of life: First job, Marriage, Buying a house, Children, Promotion, Education/Marriage, Grandchildren/Retirement.
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