What Does Financial Management Involve?
Financial management involves decision making regarding our cash and involves several areas.
The following are the key areas that you should look at:
Cash flow management
This involves assessing your current net financial net worth [what you own minus what you owe]. This should generally tell you whether you are on your way to financial freedom or financial disaster.
In short, most financial experts would advise you accumulate as much money in savings as you can afford, and this should be your main priority in financial planning.
Once you have decided the amount of money you would like to save, you should consider where to put your savings with the aim of getting the highest returns you can from your savings.
Most financial planners would advise you to go for something more sophisticated than a normal savings account. At a minimum, you should go for fixed deposits.
Insurance planning is required to ensure that all your properties are protected and that your family members are well protected by having enough insurance coverage.
The topic of tax planning affects everyone who receives income, yet it is an area that is overlooked by a lot of people. Therefore, this area should involve strategies that optimise the local tax regulations in the area of your income, stocks, real estate, and property.
We do not expect to work forever, or want to. Therefore, having a retirement plan regardless of of your age is essential! You wouldn't want to be forced to go back to work after retiring age due to lack of money!
Having an estate plan or a will shall ensure that your wishes for the future are carried out. In addition, an estate plan or a will can provide financial protection for your family, ensure your property is preserved, and minimise family disputes.