It is a truth that financial planning is even more important for the individual with an average income than it is for someone who earns a very high income.

The case is this: an average individual has to build his income stretch to cover many needs, and normally there is little cash left each month after paying all the bills and loan.

Hence, it is wise to say that financial planning can assist you in a number of ways, among them are:

- Financial planning can assist you set up beneficial use of your present income and savings. By having every household's outlay budgeted and a savings blueprint drawn up, it should help you spend your cash wisely and effectively.

- It can contend the effects of inflation on your savings by having your savings invested in an investment vehicle that pays higher returns than the normal bank account, it will add in a couple of muscle to your savings and help you achieve your financial goals in a shorter term of time.

- It can thrust you to take advantage of savings and investment options that exist now, but may not be available later.

For example, you want to put in some of your savings in a particular unit trust fund that pays good returns. However, the fund's approved size is fixed and the units are easily snapped up up by investors. Now, if you were to maintain some extra money and buy some of these unit trusts before they are all taken up, you will hopefully make your cash work for you through future gains from this investment.

- Finally, financial planning helps you identify the expected sources and total of your retirement income.

The key here is to START NOW!

By starting your retirement planning now (not later!), you can measure how much cash you will require to maintain your current lifestyle and where this money will come from.

Many individuals, specifically those who have just started working, often put their retirement planning on the back burner for reasons such as "I just started work" and "Oh, I am still young".

Many, however, fall short to realize that by starting early to save for retirement, you will be able to save and put in more due to the concept of "compounding interest", provided that you invest your savings wisely.

perhaps you do not want to wait till the age of 65 to retire. For all you know, by the age of 40, you might possess already reached your financial freedom and do not have to worry about getting up early to clock in or work till late hours because there are deadlines to meet.

You can then commence a business or alternative job that does not involve clocking in and reporting to your employer, especially if that person is other than you!