Here are five reasons why you should start financial planning today regardless of your age to secure a better future financially
You would probably have heard many reasons why you should start financial planning from your financial adviser, friends, and family, or even advertisements. However, there is probably an equal number of reasons why you haven’t started – ranging from “It’s too early to start” to “It’s not my cup of tea”. It is no wonder that year after year, we always see at least two-thirds of Singaporeans not being confident about their financial future regardless of their age.
At MoneyOwl, financial planning is at the heart of what we do. Thus, we have compiled five reasons why you should start financial planning today.
- You only live once.
Contrary to the popular notion that you only live once thus you should live life to the fullest and spontaneously is the belief that life is just too precious to be lived without any planning. Whichever view you subscribe to depends on the form of planning we are referring to. A strict financial plan that deprives you of living well today in hopes of a better tomorrow is neither wise nor sustainable. A better plan would help you balance between living well today and giving you a roadmap to meet whatever life has in store for you.
You only live once and the stakes are too high to fail.
“By failing to prepare, you are preparing to fail.” – Benjamin Franklin
- You don’t want to miss out on the important things in life.
We have often heard people speak with regret about the things they could have and should have done if they knew about something earlier.
Hindsight is 20/20. Though no financial plan can give you that kind of perfect vision, you can improve it by learning from the mistakes and experiences of those who have gone before you. A good financial plan should be built on the wisdom of hard facts and evidence to give yourself the best chance of success. Though it is tempting to go on it alone, you would be wiser by learning from industry experts.
“Good fortune is what happens when opportunity meets with planning.” – Thomas Edison
- You have unlimited dreams but limited resources.
Our world is driven by the economics of scarcity – limited resources to meet unlimited demands from the world’s population.
It is no different at a personal level. Spending a dollar more on one part of our life equals spending a dollar less on another part.
A good financial plan should help you prioritise between conflicting needs. It should also optimise your resources so you can achieve your goals. A study published by Princeton University psychology professor found that when people are faced with scarcity, they are more likely to make bad decisions because much of their brain power is spent on these concerns. Free your mental bandwidth with a financial plan so that you can become more efficient in other areas of your life.
“An hour of planning can save you 10 hours of doing.” Dale Carnegie
- You want to be a good spouse/parent/child.
All of us play a role to someone important in our lives – a spouse, parent or child. Some of us even take on multiple roles, such as the middle-aged worker who must support his parents’ retirement needs, children’s living expenses and spouse’s need for companionship.
While fulfilling so many roles, we often forget to take care of the most important person, ourselves. We also assume that we will always be around to hold up the skies when it falls. A good financial plan should also include your needs and the aspirations of your loved ones in the equation. This is because the measure of who we are is what we do with what we have.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett
- You want to be able to spend guilt-free.
Ultimately, the whole point of earning money is to spend it. Money was never designed to be an end in itself but to serve as an enabler for us to define ourselves, make our lives count, improve the lives of others and to leave a legacy behind after we are long gone. How we have this freedom to spend at will can only be found in having a good financial plan which gives you the assurance that the pieces in the puzzle are in the right places.
Financial planning isn’t about making you save every last cent but making sure that every last cent is well spent.
“In the truest sense, freedom cannot be bestowed; it must be achieved.” – Franklin D. Roosevelt
We hope we have given you enough reasons to take action today and suggestions to create your financial plan. Sometimes, a bad experience could prevent us from giving it another shot.
This is where we can come in to assist you. MoneyOwl was set up with the sole purpose of bringing a more holistic approach to financial planning for everyone. Combining decades of evidence and experience in the field, we can help you balance your life goals, optimise your resources, and take care of your loved ones with the end outcome of achieving freedom.
Let’s stop spending money we don’t have to buy things we don’t need to please people we don’t even like.