Financial security: Importance and planning

By Charles Hopkins Published 12/14/2006 | Security and Safety

Financial security provides every individual the impetus for better living. If you are financially secured, things are always on a smooth run in your life. Does financial security mean you will never come across economical crisis? Answering this question right now in absolute yes or no wont be justified. Lets look at it from a different perspective.

What is the key to financial security? Is it an asset of a secured bank balance, property and credit to refer precisely? Well these things give you financial security but maintaining this security is really a big deal. This is exactly where planning for financial security or more comprehensively financial security comes into focus.

Take an example

You inherit a large property of your grandparents. And elated as if on top of the world you start using or spending from the asset in reckless terms. What will be the consequence in course of time? Things get over without giving you an opportunity to recover.

On the other hand, another gentleman begins from zero and through conscious financial planning; bit by bit he builds up an asset and may be at the end of the day this turns out to be an empire. History has many such legend examples where the individual began from nothing and ended in everything.

Motto you derive

What do these two examples try to portray?  They actually signify the importance of financial planning. If you plan financially in the right way financial crisis will stay far away. Just remember one thing; planning is actually done for two reasons.

The first among them is for smoothly existing on this earth and more important is for facing economical crisis with ease. If any disastrous consequence takes place regarding your investments and your money gets blocked, the security money will help you to sustain in this crisis hour. How will you secure your finance? This is exactly what financial planning was meant for.

Role of financial planner

The advice from a financial planner becomes important while you plan for security of your finance. A financial planner will look at things from a professionals viewpoint. Sometimes you might get swayed away by some lucrative schemes as portrayed by some insurance or banking companies, but you dont know how to judge it from the perspective of your financial position. Who can do it best for you? There you require a financial planner.

Similarly dividing your investments, going for the 401(K) plans and putting exact amounts in the life insurance have to be schematically chalked out when you sit down to make plans for financial security. A quick and proper guidance is most sought after to come to a judicious decision. The financial planner can guide you in the right direction showing you the benefits as well as the pitfalls.

Above all financial planning is no childs play. You need to dedicate an ample amount of time to work on it and systematically schedule things to earn maximum benefits. So do you think all these will be easily managed by you in your tight time-frame and work hours?

Therefore plan your finance in your very own way but dont hesitate to take the guidance of a financial planner. That works in a more fruitful way.