There is a pronounced disparity between perception and reality when it comes to financial planning. A plan needs a well-coordinated smart risk and tax methodology to manage and improve outcomes.
Consider this: salaries tend to grow roughly at the same rate as inflation; however, the cost of education in Kenya increases so drastically over the same period of time. If you had taken on an education policy years ago, particularly to cover university fees, with school fees now almost doubled, it’s a losing battle to trying to keep up.
The Current State Of Affairs
Covid-19 has had a massive effect on our economy. We have had to rethink our lives and deal with disruptions. This is the current state of affairs most people are facing as they review their financial plans:
- A Higher cost of education sparked by Covid-19 as education institution struggle to maintain the same rate of funding to education.
- Unemployment or less income for most will derail retirement plans, and reduce savings. There is less clarity; choices based on circumstances and outlook are hampered.
- Deep financial holes for those unable to make payments to creditors. Also, more and more people are getting into debt to meet household expenses.
- Women tend to generally live longer than men, therefore need to put away more for retirement.
Learn more: 7 Reasons Why You Should Have A Financial Plan
Closing The Gap in Your Financial Plan
Moving forwards, to close the gap in your financial plan you’ll need to invest more. To do so successfully, you need to do the following:
- Control your emotions, particularly your fears. This will allow you to make more rational decisions and hence make good investment decisions.
- Have a smart investment strategy that takes into consideration all aspects of risk and tax to improve outcomes at the end of the investment horizon.
- Preserve wealth. Live within your means, and adopt wealth preservation methodologies.
- Close the financial literacy gap. Read. And, read widely – current affairs, biographies and educational materials/books to expend your scope of what is possible and what is available to you.
- Take to your financial advisor. Have a progress conversation against your objectives, which reiterates your hopes, fears, dreams and priorities. This will help you better adjust your portfolio, and quality the benefits of your current plan by revealing a clearer roadmap.
Learn more: How to Accelerate Your Personal Financial Growth
The Bottom Line
Understanding the current state of affairs and seeking ways to navigate to close the gaps in your financial plan is key to make informed, impactful decisions over time. Going forward, adjust your circumstances as your outlook changes.
Happy Building!
Image credits: Top by Gabby K via Pexels
