When people hear about financial planning, not everyone readily embraces it. This is because some people tend to associate financial planning with tedious work. However, looking at the potential benefits of financial planning often has the opposite effect. When you start hearing about ways financial planning can improve your life or help you escape financial struggles, you might find your interest increasing. Talk to a Tennessee bankruptcy lawyer if your financial situation has led you to bankruptcy.
CONSEQUENCES OF NO FINANCIAL PLAN
Other than the benefits of financial planning, looking at the consequences of no financial plan can also motivate people. Some potential consequences of no financial plan include things like less overall wealth and more debt. People with no financial plan tend to struggle more with:
- Owing more money to various people and organizations
- Having higher interest to pay off
- Paying higher fees and higher interest rates
- Expensive mortgages
Less financial literacy overall also tends to lead people to borrow against their retirement and pension accounts. They may struggle with higher debt because they are not keeping track of their debt and interest rates. Some people with less financial literacy also tend to engage in riskier credit card spending.
No financial plan can mean no awareness of your current financial situation and no awareness of your financial future. Not knowing where you are headed or where you want to go leaves little room for benefits. Leaving finances up to chance leaves more room for mistakes.
BENEFITS OF FINANCIAL PLANNING
On the other hand, some of the major benefits of financial planning include things like:
- Being prepared for each life and financial transition
- Accomplishing your financial goals
- Avoiding financial setbacks and mistakes
Financial plans can have a myriad of other benefits too depending on your situation and your own goals. You can use a financial plan to escape debt, pay off your house, move into a house, or pay off your student loans. Having a financial plan is like having a roadmap for your money.
Creating a financial plan involves identifying your long-term financial goals and setting a timeframe. What this does is tell you when your financial goals and steps need to be completed. Otherwise, you are back to leaving your finances up to chance and all the risks that come with it.
Long-term goals take longer than ten years to accomplish. Write down what you want to happen in roughly ten or more years. Then break this down into subgoals and steps. Ask yourself what you need to do or what you can do each year to move closer to each goal.
BANKRUPTCY LAWYER IN KINGSPORT, TN
Not knowing what to do when your finances are taking a dive is often overwhelming. Many people do not want to turn to bankruptcy but might not have any other choice. Feel free to contact us today at Tom Bible Law by dialing (423) 690-7712 for a consultation about your situation. Our experienced Tennessee bankruptcy attorneys can look through various options for bankruptcy along with the costs and benefits of each. We serve clients in Tennessee cities like Chattanooga, Kingsport, and Tullahoma.