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Five reasons why financial security matters

Five reasons why financial security matters

Every time you get some additional money as bonus, you wonder whether to spend or secure your finances. Financial planning is not new. However, with information overload, professional financial planners are making their mark. When you are young, you may not think too much about financial security. However, this is actually the time when you need to know why it matters.

If you still need convincing, here are five reasons to start planning financially:

Freedom: Independence... that sense of freedom. The more you depend on someone to take care of your expenses, the less control you have on your choices in life. Also, it's an empowering feeling to be in control of your financial stability. So, plan, save and invest in such a way that you have enough money to do all that your heart desires.

Avoid debt: If you have money, you won’t have to borrow. Take the example of a debit v/s credit card. If you already have enough funds in your bank account to go shopping, you can easily use your debit card. Credit card is a very costly way of borrowing money from the bank for a short term. And it can amount to extremely large bills very quickly as it gives you a fake sense of abundance. You can avoid this debt. On the other hand, there may be times you will have to borrow for some things – like a house or car for example. In such a case, you will be subjected to thorough financial checks by banks and institutions. They do this to minimize their risk of default. So, for you to get the maximum loan possible, you will have to exhibit a history of strong finances.

Get rich: Aspirations, dreams and desires are limitless. Hence having "enough money" may not hold true for very long. Invest smartly, to earn better and regular profits. Life is better when you have money to spend on luxuries rather than just meeting expenses.

Emergencies: Emergencies don't give any warning when they come barging through the door. In dire situations, money should be the least of your worries. Invest smartly to be financially secure to make sure money is not the cause for sleepless nights.

Retirement: You finish your education; you get a job, and earn till you are 60 years. What happens when you retire? If you are financially secure, retirement could be your time to live your second youth.