Meaning of Financial Planning

We all want to have large amount in our savings, the problem is starting and having the persistence to keep the money in the savings fund. Without savings, you will never be financially stable. You will always be playing catch up, and that is a stressful place to be in.

The biggest problem most people have is to assume that small amounts do not matter. That is one of the biggest fallacies of our time. Everyone is conditioned to think that to start a savings account, you should have a large amount to begin with. After which, the plan would be to keep adding to that.

One reason why we started to think this way is because many banks require a considerable initial deposit; considerable in a way that not everyone can afford to put in the initial deposit. That being the case, you need to practice self control and start with a savings fund in your home.

Start by putting aside all the coins you have accumulated every day. By the end the of the month, you should have collected quite an amount. Use this to open an account.

Never be ashamed to be seen depositing coins. In fact, banks welcome coins because they need them all the time. Just make sure that you segregate the coins according to denomination in batches of 100s. Look, big retail companies do this, so going to the bank with bags of coins is a normal business transactions.

Of course, if you have the minimum initial deposit requirement, then do it right away and open a savings account or a time deposit. If you have a problem with control, then make sure the account you open is not an ATM account because that will give you easy access to your funds, and we all fall victim to shopping temptations every so often.

Make sure you check with your bank what the charges are for all possible scenarios like falling below minimum, or no account activity. You need to go in with both eyes wide open.

Once you have your savings account up and started, make a commitment to put in something every week, month, two months - it does not matter what the time frame is, as long as there is activity every 3 months.

Saving money is something you should also teach your children (when you start a family) especially since learning the value of money at an early age will auger well for them when they are older. This is one of life’s most valuable lessons because it can literally bring you down if you have no concept of savings.

Being financially stable is not just about making the money. It’s about managing it, and saving it. Plan your purchases so that you will always have a safety net. When the time comes (and it always does) when you are faced with sudden expenses that are unavoidable, you will not have to panic or go to loan sharks begging for help.

Finally, one of the best ways to save is to pay cash always. Avoid credit card purchases because there is a lot of false confidence in them, and it has an incredible way of building up a bill without you realizing it.

Quote of the Day:
“Once you've cleared your head, project your own financial scenario using worst-case scenarios, such as lower rates of return, higher taxes, lower salaries, and more personal responsibility for expenses. Can you still ‘make' it? If not, take the action necessary to improve your odds -- increase saving, cut spending, lower your taxes." - Kevin McKinley

Conclusion:
Learn early how to save, and when you are old and grey, you will never be wanting for life’s small pleasures.

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