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Given that many so-called financial “experts” have seen their predictions fall to ruin in the wake of the current economic crisis, one might wonder whether or not financial planning is important at all. Some people might be thinking, “Why not just handle my finances myself? I couldn’t do any worse.” This is probably the wrong attitude. People who have long-term financial goals that they wish to meet should probably not be thinking, “I can’t do any worse,” so much as, “How can I do better?”

Why Financial Planning is Important

If all you needed to do to have a secure future was put your money in a bank, then you probably wouldn’t  need any financial planning. But people’s lives usually don’t work that way. Most people have some financial goals, even if they are not completely clear. Those goals may include having enough money to live comfortably after retirement, generating enough savings to allow early retirement, creating a fund for their children’s college education, or financing a new business. For these goals, simply putting money in the bank is often not enough. Interest on standard savings accounts is as low as ever, and usually not enough to generate the kind of returns that many people want or need.

How a Financial Planner Can Help

Financial planning with a finance professional can help an individual get introduced to the various financial products that can help him or her reach his or her goals. The types of goals that a financial planner helps with include: Investment planning, where the planner helps the client find options to make his or her money grow; insurance planning, which the client may use to manage risk and generate some financial security; retirement planning, another financial security goal where the planner helps the client insure he will have money to live on after retirement; education planning for the client’s children; and tax planning for reducing tax liabilities or deferring tax payments so that money can work for the client. All of these things require specific knowledge of the products involved, which makes quality financial planning very important for almost everyone.

What You Should Know About Financial Planning

If you do plan to “do it yourself,” prepare for a lot of work and hard research. If you decide that it makes more sense to take on a financial planner, you’ll want to put that research and work into finding the right financial planner for you. Remember that financial planners have specialized knowledge, but they can’t all know everything. You should talk to a few financial planners and research their backgrounds before settling on the financial planner who you think will be most suited to meeting your personal financial needs.

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