Page 575 - Introduction to Business

CHAPTER 15 Personal Financial Planning 549

Providing for Your Family
Well-considered financial planning enables a family to identify appropriate finan-
cial objectives and to facilitate their accomplishment. If people fail to provide for
their families, society as a whole suffers, both from the burden of supporting more
people and from the effects of such examples of financial irresponsibility. Many
social problems, such as the high proportion of women and children living in
poverty, child abuse, teenage gang activity, and crime in general, have grown out of
the failure of individuals to provide for their own families.

Planning for Future Needs
Setting money aside for a rainy day and investing wisely are considered morally
worthy actions. Saving should be an element of everyone’s budget. Long-term
financial planning includes setting aside funds on a regular basis to provide for
future needs such as retirement or children’s college expenses. Savings are also nec-
essary to meet unexpected financial demands such as home or car repairs.
Managing money wisely is personally rewarding. Good money management
enables you to meet your family’s financial needs as well as to help others. You will
enhance your children’s lives, not merely by giving them things but by teaching
them through example how to handle money. Virtually everyone knows that money
does not bring lasting happiness. Attaining wealth for no reason but to be rich
would be utter folly, but managing money to achieve appropriate goals and objec-
tives is true wisdom.

Keep Money in Perspective
Who has not heard the old adage, money can’t buy everything? Most people agree
that relationships to other people are more important than money. On the other
hand, how many people occasionally place their jobs ahead of their spouses, chil-
dren, relatives, and friends? Where you spend your time is the true indicator of what
you value most. Workaholics often lose track of their priorities. Anyone who sacri-
fices important personal relationships for career or monetary advancement has
made a tragic error in judgment.
Near the end of life, has anyone ever looked back and said, “I wish I had spent
two more hours each day at work”? Certainly not! Regrets usually involve the lack of
time spent with aging parents, children, and spouses. Remember that money is
merely a means to an end, not an end in itself. Money is required for the acquisition
of food, clothing, shelter, and other necessary items. If you have a lot of money, then
you can purchase nonessential items, such as caviar for food, mink coats for cloth-
ing, and large mansions for housing. However, no matter how rich you are, you will
never have more than 24 hours a day to live. Everyone is equally poor or rich in that
regard. How you spend your time is ultimately connected to how truly successful
you are. Managing your money wisely will enable you to spend your time in a more
useful manner, such as with family and friends.
Don’t waste your time or your money! A primary advantage of good financial
planning is that the money you make will be used more efficiently. And if your
money is used more efficiently, then you can work fewer hours to achieve the same
quality of life than if your money is not used efficiently. Set realistic financial goals
that can be achieved without sacrificing important personal relationships.
For a married person, financial planning must be a team effort with his or her
spouse. Building a good marriage requires spending time with your spouse, and
part of that time should focus on financial planning. Spending time together is

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.