Crosby Corporation: Stress-Free Financial Planning

Everyone wants to make as much money as possible. This is not surprising at all. Even the kings in ancient times could not get enough of the tributes they could easily exact from their subjects so that they can build palaces, ships and car ports (or should we say stables?).

Not all can become kings or presidents, for that matter. But we all need to earn enough to meet our needs. What most people fail to consider, however, is that financial planning begins not when you get a job or start making a salary. Much like going to college, one prepares for a college degree the moment one enters grade school. Likewise, gaining the knowledge and the skills to become financially stable starts with the very first step: when you get hold of your first paycheck.

Here are some principles to follow to achieve stress-free financial planning:

1. Financial planning initially requires knowing how to earn or make money

Obviously, before anyone can talk or think about planning how to spend money, one has to earn it first. Yes, one can borrow; however that is the most dangerous route toward a risky proposition, unless, of course, one already knows how to handle money and avoid risks. There is no shortcut to the process; either one has the money to budget or has the capability to raise that money somehow and not stock up with huge loans – a warning on this!.

2. Decide what the money is for

This is a no-brainer. Every teenager knows this: it is for a pair of shoes or a date on a weekend. But that is the case where money is merely handed down. Or it could even be earned through hard work, such as mowing the lawn or minding the family store.

But for more serious money and goals (for business, that is), one has to have a more accurate plan for spending the money and how to make it grow as much as possible with the least time possible.

3. Budgeting requires considering the risks

We will never find out the ultimate secrets to budgeting that will bring about the highest returns and with zero possibility of failure and feel like being scammed. Risks are part of life’s realities, much more so in business. Every expense has a hidden risk in the form of additional or unexpected costs or loss of profit. Buying a digital camera, to give a simple but convincing example, is no longer like buying a shirt. You buy a shirt and wear it without having to pay another cent, although you will have to spend for washing it regularly. A camera, however, might require buying a camera bag, a tripod, a selfie-stick and so many other accessories to make it fully functional for all occasions.

Financial planners input contingency costs to cover expected and unexpected expenses. This takes care of the “risks” appurtenant to a particular item of expense in a company’s budget.

4. A budget must include savings

The importance of savings cannot be overemphasized. Many people, in fact, go through life without ever having a semblance of a lifetime savings, let alone a piggy bank. Unfortunately, many such people live in subsistence levels that does not allow them the luxury of putting aside some money regularly.

But a business enterprise cannot survive without provide for sufficient savings to cover unexpected as well as necessary expenses along the way. The best rule to follow, to echo Warren Buffet, is to put aside a certain percentage for savings first and spending the rest for one’s regular expenses and not the other way around, which most people practice.

With enough practice, anyone can get the knack for efficient, stress-free financial planning as a personal or business practice.