It really doesn’t matter whether you have an abudance of cash or not, it always helps to forecast your finances.
For those of us who don’t have a huge amount of money, a forecast will help us avoid any future issues. It will allow us to ensure that we always have the best foresight on things that we possibly can. Any issues are identified early so shocks are hopefully kept to a minimum.
It also allows us to plan our spending in advance and set financial goals that we aim for.
Lack of financial education
I created WorkingClassFinance, and specifically my Financial Forecast spreadsheet, to help others help themselves get an understanding of their finances.
A common theme though, as unfortunate as it is, is that people at the “poor” end of the scale often don’t fully understand money or finances. People often get into financial trouble because they aren’t given a financial education. In my opinion, this problem is something that needs to be addressed at a school age. If we would have been taught about the monetary system at a younger age, then we would have been better prepared once we reach an age where we have to take care of things ourselevs.
If you have money, there is absolutely nothing wrong with staying in control of it. There are many people who earn a decent salary, or have a large amount of money, yet fritter it away on things that don’t even make them happy.
We often hear of stories of people who win the lottery or receive a large inheritance and end up bankrupt within a few years. You would think that people who receive these amazing opportunities would take full advantage of them to set themselves up for life. However, if people aren’t fully clued up on their finances then you can’t really blame them for blowing their cash. They spend it on things they think they are enjoying but often actually don’t benefit them long term.
Having been in the situation where I was constantly worrying about how to pay my bills, I knew I didn’t want to be in that situation again. I know that sometimes the situation is difficult to get out of, but the sooner we know about it, the sooner we can fix it. The Financial Forecast is a running document that anyone, and everyone, should have to give themselves the best chance of avoiding any financial mishaps.
So whether you have lots of money and just a little, do your future self a favour and make sure you create your own Financial Forecast and start to gain control of your finances.