Have you had any experience creating a solid event plan in your cities, such as a marketing or big music event plan? Then the event budget was reduced, or the star singer canceled the music event for some reason. The event plan you put so much time and effort into became worthless and useless. Or the situation changed, forcing you to plan all over again.
Here is the irony of planning that demotivated us: you spend so much time and effort but no use of it. Sometimes it usually does not work out the way we plan. Chaos intervenes, which we never expected. If you plan, clarity still comes in. If not, It is just a looser situation.
Does this mean you should not plan? No. Planning is in your DNA. It is a simple truth that you are planning in many situations in your life even without knowing that you are doing it. You plan for a wedding, vacations, and every day because you know the benefits of making a plan ahead of the event:
- Know what to do to achieve end goals or results, and
- Mitigate foreseeable chaos
Sometimes we all need clarification about the plan and planning. Yes. The same is the case for your finances. You are earning money, but if you are not managing money prudently, then it leads to stress,
Most people manage their money without a financial plan which is not the right approach to moving into this financial jungle and trying to achieve financial independence. You should know what is a financial plan and financial planning when you are managing your money.
Yes, the truth is there is a difference between financial plan and financial planning.
Let us discuss it.
What is a financial plan?
A financial plan is a roadmap, blueprint, or strategy that helps you achieve financial goals and financial freedom.
A financial plan shows you a comprehensive picture of your current finances, future goals, and any strategies you have set to achieve those financial goals. The financial plan should include cash flows, savings, income expenditure, asset liabilities, net worth, debt, investments, insurance, and other economic life elements.
In simple terms, Where are you today? And where do you want to go? and how to achieve there? This written document involves looking at your financial picture and advising you on attaining your short-term, medium-term, and long-term financial goals.
Generally, It is a written Comprehensive Financial Plan, a 60-70 pages document. Yes, the most important is that it is a customized financial plan for you, not linked to anyone or any case study. Some say I got a 2-page financial plan from free online websites. Please check whether it is suitable for you or not.
The true purpose of a written financial plan is to achieve your financial goals and financial freedom in life and be in a happy money zone.
Friends, it is only helpful if you have implemented the plan. If you have yet to implement, then you have just kept what you want in your cub board, just a written financial plan and not financial planning.
What is financial planning?
Financial planning is a broad concept. You can say a Holistic approach to your personal financial life. It covers writing the financial plan, implementing it thoroughly, monitoring and reviewing things timely, and suggesting corrective action steps as and when necessary.
On the other hand, financial planning is a more comprehensive look at your entire financial picture over time. It will help you to see how and where you will save money to reach your goals and help you stay on track if something unexpected happens. In another way, Financial Planning is a 360- degree approach. It enables you to determine how to meet long-term goals like paying for a children’s higher education expenses, buying your dream house, or paying off a mortgage.
Friends, Yes, It is a contineous process, and writing the financial plan is just a part of the financial planning process. For your understanding, this is an ongoing process.
It can improve your relationship with your money and reduce your stress. Whether you need support for your current needs or to build your long-term goals like retirement, it helps you in all situations.
You are figuring out how to go from your current situation, say, point A, to your future goals, say, point B. How do you get there?
When you are doing financial planning, where do you today? It means where you are now with your finances to where you want to go means where you want to be in the short, medium, and long term.
Friends, you should make a written financial plan, implement it and review it periodically to achieve your financial goals and empower your money habits.
Friends here is a simple example of understanding the difference between a financial plan and Financial Planning.
It is like a Wedding and Marriage.
The wedding happens one time, but Marriage is Lifelong.
And to make your marriage a success, you must make lots of adjustments with lots of ups and downs.
The written financial plan you make is a one-time activity. Still, the contineous actions as per the financial plan are a lifelong contineous process.
- Financial planning is an ongoing process, and financial plan is the documentation.
- The financial planning process is in the depth of money management to achieve financial independence, and the financial plan is on its surface.
- Financial planning is a continuous process of thinking or deciding the right strategy to manage money. A financial plan is the means to formalize planning.
Your written financial plan is like a GPS navigator device; if you have purchased it and kept it in your cub board, then no use. You have purchased a machine like other instruments you like. If you use it regularly, then you get the desired results. Yes, charting an optimal route regularly balances saving for the future while leaving enough to live your best life today.
Plan Well To Live Well!
I am a CERTIFIED FINANCIAL PLANNERCM, CHARTERED WEALTH MANAGER®. For the moment, I have shared my experience growing up with you because it had a tremendous impact on how I do what I do. If you have a question about your financial situation, please connect me. I would be delighted to try to be of service.
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