What is it about financial planning that causes many people to avoid it?

You know there is a problem when even the most budget-conscious consumers avoid financial planning. Many people think that all financial planning involves managing investments or large sums of money, but that doesn’t have to be the case. There are benefits of financial planning at people of all income levels. There are a lot of misconceptions about this topic, so here is the whole story on five of the most common financial planning myths.

1. Financial Planning Is for the Wealthy

It’s not. Everyone can benefit from financial planning, and you may be able to achieve your goals faster with help than by going it alone. A financial planner our counselor can help you avoid biases that you may have about your personal assets or your abilities to achieve your goals. Their views are generally based on facts and knowledge of risk, and they can give you access to products, services, and knowledge that you may not be able to obtain on your own.

2. The Financial Planning Process Is Complicated

It’s not. There are six easy steps:

• Gathering your financial information
• Setting goals
• Assessing your current financial situation
• Determining a strategy to achieve your goals
• Executing the plan
• Monitoring the plan’s process

3. I Can Create a Financial Plan on My Own

You can create your own financial plan, but to do so, you will need some expertise. There are a few software programs and books to help you, but like anything else, tools are useless if you don’t know how to use them. If you do decide to create your own plan, contact a financial counselor for a second opinion.

4. Financial Planning Is Not Necessary for Me

Today, it is more important than ever to have a plan in place to achieve your goals. Life can turn on a dime. You can be healthy one day and sick in the hospital the next. When life spins, your bills don’t stop. The rent, car payment, utility, and grocery bills are still due. A financial plan stops your life from spinning out of control when the unexpected happens.

5. It Is Too Expensive

It’s not. There are low- and no-cost options to help everyone experience the benefits of financial planning. Reputable nonprofit organizations are out there to help you plan and save so you can meet your goals and stay out of debt.

Paid professionals charge fees based on their level of services. The more assets you have, the greater their fee. Others charge you nothing but earn a commission based on the products they sell. A few use a hybrid approach: they charge fees from their advice and earn commissions on the products. If you want to hire a planner, ask about their fees. If you want to avoid fees, look for a nonprofit credit counselor who offers free or low-cost financial advice.

Get started today and enjoy the benefits of financial planning.

Image source: Wikimedia Commons

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