Planning for a financial year entails that you decide on your financial goals and create a clear roadmap in achieving that goal. This can be done personally for you and your
business, or by employing the services of a professional.
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The importance of financial planning is enormous. It helps you take stock of your assets, and reduces your chances of losing money. Financial planning helps you project accurately into the kind of financial future you desire, and highlight all the necessary requirements for bringing it to pass.
As you prepare for a new financial year, here are different things to take note of:
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Laws And Legislations
In Nigeria and numerous states within, you will discover that laws and new regulations keep coming up to meet with the dynamism of society. Especially with the advent of COVID, there has been an incredible shift in work ethic and employment directives, which inadvertently, affects both personal lives and businesses. You must do adequate research on the relevant laws, ensuring that your business operation or personal financial plan is in no contravention of the laws. You will examine both national laws, and laws in your state of residence/state of business operation. It is also noteworthy to study bills that are about to be passed into law in the nearest future, so you are not caught by any surprises.
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Review Your Previous Financial Year
Have a detailed review as soon as possible. Even if you plan to do this by yourself, you can involve other people to bring objectivity to your review, only at this stage. Find out how much income you generated, and expenses you made. Find out key areas that take money out of you, and identify consistent channels that brings money into you. Go through your accounting records, and scrutinize every penny until you have a full grasp of how money was used in your financial year.
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Create Financial Projections
Now that you have had a glimpse of the past, it is time to look into your future. What are the potential areas you see that will bring in more opportunities and rewards in the upcoming year? Identify them all. Identify the reasons why you were not able to explore them in the previous year so that you will understand your limitations. Chances are that your previous limitations are still existing until you do something about them. You can also learn from people and businesses you watch closely, on how they have succeeded in recent times. Pick out relevant and applicable areas to you, and act on them.
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Have A Contingency Plan
This should also include an emergency fund for times when things don’t go as you plan. Create an effective and solid backup plan for all of your ideas. Strategize on the different methods you can employ to achieve the same results you desire. Having a contingency plan is not only smart but helps you thoroughly access your ideas and evaluate them before initiating action.
You do not need to have all the money in the world before you start taking financial planning seriously. In fact, this is the very act you need to achieve your financial and money goals. It is a step in the right direction if you are looking to propound your interests and increase your cash flow. Financial planning is no longer a luxury, it is the lifeline of every
successful financial future.
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