Financial planning is a must if you want to gain financial independence. It is not one-time planning. You will have to make financial decisions frequently. Some will aim at short-term goals while others will aim at achieving long-term goals. When it comes to gaining financial independence, you have to maintain a balance between short term and long-term goals. For some reason or other, many people keep putting off financial planning, thereby regretting in the end.

You will probably think that you have enough time to start financial planning. Now is the time to focus on some other things, but the time beside you is never enough. Living with regret about being lackadaisical about financial planning is very painful. Further, all mistakes done in the past will have an impact on your finances in life ahead of you.

It is crucial to look into where you are and where you want to go. Unless you have an accurate financial picture, you cannot tap into your money. Many of you do not realise the importance of saving and investing because you think it is too early to do so. Financial management is not just about making decisions but acting upon. Here are the financial components you should not ignore.

Decisions to make your money act strategically

When it comes to personal finances, it is not just about making too many decisions but selecting a few strategies you will stick to throughout your life. Every penny is essential, regardless of what you earn. You cannot throw caution to the wind. Once you make a decision, you need to focus on the implementation part. Making decisions are far more comfortable than execution.

For instance, creating a budget is one thing and sticking to the budget is a different thing. Many people create a budget to take control of their spending, but they give up in the middle. A good rule of thumb says that you should make realistic decisions and try all the harder to achieve them.

If you are serious about your goals, you will have to track where you spent each of your dimes. From eating out to shopping, you will have to track every expense you make throughout the month. However, you cannot sit back now. You will have to make a strategy to keep your expenses in control. If you are going beyond your budget, you will have to look over expenses to cut down.

Asset allocation

If you want to grow your wealth, you will have to invest money. Before you start investing money, you should know the ins and outs of investments. Various assets are out there you can consider growing your wealth. Make sure that you have a strategy to invest your money.

You know very well about your investment goals and the right way to achieve them. If you throw your money in any financial products or you invest money in real estate, you are asking for trouble. It is:

• Because you think it yields the maximum profit or you let your money be idle in your account;
• Because you do not have time to invest it or do not know about investing

You should consult an investment expert who will understand your financial condition and investment goals before suggesting your trustworthy investment options. Investing in different assets that move independently will help you withstand the fluctuation in the market.  

Keeping debt as minimum as possible

You cannot achieve your financial goals if you are not able to tackle your debt. Online lending has made the accessibility of loans online in Ireland faster and easier, and this has become one of the significant reasons for reckless borrowing. Financial experts suggest borrowing money only in case of emergencies, but some people neglect the importance of savings and start borrowing for everyday needs.

You should borrow money only when you can afford to pay. Estimate the total cost of the loan before putting in the loan application. This will give you an idea if you can keep up with repayments. If you have multiple debts like personal loans in Ireland, credit card bills and other small loans, you should frame a repayment strategy to clear all dues. Consult a financial advisor in case you have no idea of how and where to start from.

Ensuring your money is aligned to your needs

Money has a direct relation to growth. You must know how your money is helping you meet your needs. Your money must serve your daily needs, and at the same time, it must be invested somewhere else. Your money should act as a beam balance between your everyday needs and investment goals. 

If you want to live your life without financial stress, you will have to take charge of the components mentioned above.