7 Reasons We Need Financial Planning

In the last 20-30 years, the days of our parents still pay for our lives, there is no such thing as professional Financial Planner or Financial Planner in Indonesia. But 10 years the profession has been a lot of pop in Indonesia. With the development of an increasingly consumptive lifestyles, rising inflation makes the necessities of life in the future more and more expensive, the number of investment products offered, and the more conscious of the welfare of his community.

Some of the reasons why we need a Financial Planning:

1. To protect ourselves and our families from financial risk

In the life cycle of course there were times the rising and falling levels of life, and can not be denied, wherever our life situations, certainly relate to money. Ups and downs of the financial situation can still be solved with the help of a professional. What are the critical issues and emergencies related to finance, for example are: job loss, illness, accidents that cause disability, and death of the head of the family as a source of income.

2. To pay off debt

It's very good if we already have investments, either investing in capital markets, property, business or valuables. But there are still many among us who also have a large debt, especially consumer debt. It is actually very important to look for a way out. It is not appropriate to invest each month in order to collect the debt accumulate assets but also the interest is higher than the results of our investments.Therefore, completing the debt is the most important thing in a Financial Planning we have.

3. For the cost of raising children

Every parent will want to provide the best for their children. Therefore, a sizable portion of household budgets in the cost of raising children that can last about 20-25 years before our children can pay for itself. This fee covers since the child was born, until the cost of the wedding, but the greatest cost is the cost of education since it entered the preparatory school (pre-school) and college students. As an illustration, if the current tuition is $ 5 thousand, with the presence of inflation, the cost in 15 years to around $ 77 thousand.

4. For the purchase of assets, from cars to home

The home is a major asset That should be owned by someone, other than for use as a residence, the house also becomes an asset Increased in value from time to time. The second asset is a must-have vehicles. A comfortable life of the vehicle is 5 years. So, like, every five years we need to replace our vehicles.

But not everyone, though having a job, can afford to buy homes and cars because the salary is just enough to cover their daily lives so that from year to year is never enough money to buy assets. Therefore needed a solution to the desire to buy the assets of the asset can be achieved.

5. To finance the purchase of insurance policies

All the assets that we have collected to meet all the needs of family life, but imagine if one day an accident, illness or death, so that we can no longer finance the economic value of our family. To protect a person who is a source of family income is by insurance. The next question is whether we have the insurance coverage is adequate to finance the next life until the family left behind can be assured. What is the actual value of a must-have insurance? What are the benefits of health insurance do we have?

6. To be able to enjoy retirement with a comfortable standard of living

Retirement is a time for us to enjoy a break from work. Obviously we want to enjoy a comfortable standard of living. But from where we can get enough money to pay pensions as we want?. It is no time at retirement, we would still have to find a job to pay for our lives. Not the right thing as well if we have to rely costs to our children may still require fees WHO for his own life even for his family. As an illustration, if our current age of 45 years with the cost of our lives is $ 1500, then the When we retire at the age of 55 years, we need funding of about $ 16 million to be Able to enjoy retirement for 20 years.

7. To bequeath our wealth to children

If you already have a financial planning and wealth then all the assets we've arranged for any purpose. In the end, if we live long and retirement, we have all the wealth that we can pass on to children. Therefore, preparing a will also be part of a planning tool, so that the next generation can enjoy and preserve the wealth that we inherit.
When it is appropriate to start planning? The earlier the start of a planning, the better, especially when age is still productive. Thus the financial conditions would be better with a long term investment to get maximum results.