We’ve all heard an earful about them — the misconceptions and untrue tales of everything financial planning isn’t! These fables are designed to deter financial breakthroughs and accomplishments and you should take them with a pinch of salt.
We seek to prove how misleading these financial myths are and why they shouldn’t be believed!
5 Common Financial Planning Myths Debunked
- The Myth: A budget is Synonymous with a Financial Plan
Debunked: A financial plan is far from a budget! Though it includes the attributes of budgeting such as spending and savings, it encompasses a lot more than that. While a budget serves to track your cash output and saving habits, a financial plan encompasses every aspect of your finances including income, insurance, savings, spending, housing, estate and retirement plans. A financial plan helps you manage your finances effectively and teaches you how to make reasonable financial decisions to improve your cash flow and balance sheet. Always seek reputable financial services.
- The Myth: Financial Planning is for the Rich
Debunked: Wrong! Granted, financial planning can be an expensive affair but not in all cases. There are several financial planning platforms and enterprises that offer their services on an affordable platter. Plus, the technological advancement and industrial expansion of the finance industry has made financial planning more accessible than ever. There is also the assumption that only wealthy individuals can consult financial planning resources, this is also untrue. You can start financial planning with a few assets and resources. Starting early and small is the key ingredient to building a higher net worth and wealth in the future.
- The Myth: Financial Planning is not for the Young
Debunked: who says you are too young to have a financial plan! Admittedly, you may not have a robust salary and assets at a young age, but this doesn’t mean you can’t have a financial plan. As earlier mentioned, investing in a financial plan from the get-go lays the foundation for future wealth. It also helps to nurture good financial habits as you go. So never say or believe that you are too young for a financial plan, because the sooner you start making wise financial decisions, the sooner your goals will materialize.
- The Myth: Having a Financial Advisor or Broker is Enough
Debunked: A financial broker or advisor isn’t the be-all-and-end-all of financial planning! While a financial advisor or financial broker makes life easy for you, they aren’t magicians that can create perfection. You also have to put in some effort to maximize their solutions and work. Improve your financial literacy and always stay on top of the trends and market patterns.
- The Myth: Financial Planning is the Same as Investing
Debunked: Many people think financial planning is equivalent to investing, which is nothing but a misconception. Investment is a part of financial planning and not the concept itself. Financial planning factors in the fundamental aspects of investment such as asset allocation, rebalancing portfolio and etcetera. It helps lay the groundwork for your investment plans and points you in the right direction to achieve your goals.
In a Nutshell
Now that we’ve comprehensively debunked some common financial myths affecting financial mindset and growth, you can filter truth from falsehood and proceed to make smart financial decisions that can shape your future.
