Financial planning

Why is financial planning important?

If you are in a car accident today and you do not survive, will your dependents be able to continue with their current standard of living without your salary?

What if you do not die or you suffer a trauma? Will you have enough money to pay your medical expenses while serving  your normal monthly expenses?

Any entity (person/business) that generates an income should have a financial plan in place.

This financial plan should be reviewed at least once a year.

In one's personal capacity one should plan for lose of income, expected and unexpected expenses as well as any risk that may lead to the lose of income. This planning is normally done for the length during one expects to be financially active, e.g. 55 - 65.

Expected expenses will include;             
- retirement provision, 

- provision for tertiary education, 

- the purchasing of property, vehicles,  furniture, etc.

This can be for a long term goal (e.g.: retirement) or short term goals (e.g.: holidays, purchase of a new vehicle, etc.)

Not having a plan is close to negligence.