Financial planning is a written document arising from a deep thinking about how a leader manages their personal income, those of their families and their organizations to ensure their income source is not eroded or cut off as a result of planned and unplanned events of life and how they can predict future cash flows, asset values and withdrawal plans.
At personal and family level, most leaders are concerned about the following needs;
- A decent home
- A functional car.
- An education/vocational training
- A comfortable retirement plan
- Guaranteed education plan for their children
- Medical or other emergencies.
- Periods of unemployment.
- Caring for aged parents
A financial plan is an important tool a leader puts in place to weather rough economic downtimes. Financial success is a choice. It results from the many small decisions a leader makes each and every day.
Having a sound financial plan and becoming wealthy is not a matter of luck, fate or circumstances, but a direct consequence of making some small but important changes in the individual’s life. Below are 6 steps a leader can adopt in creating a sound financial plan for themselves and family:
- Establish your goals in life – short, medium and long term.
- Work out what assets and liabilities you have – write them down.
- Evaluate your current financial position – how close are you to achieving your goals?
- Develop your plan – create a “route map” for achieving your different goals
- Implement your plan – make the changes and make it happen.
- Monitor and review your plan at least yearly and make adjustments when needed.