While budgeting is crucial to balancing your income and spending over the coming months and years, you also have to take steps to project how your needs will evolve during the rest of your life. That is where long-term financial planning fits in. This process not only helps you avoid or at least be prepared for financial surprises and disasters; it helps those in good financial shape become even better prepared for the future. As you get older, certain financial events inevitably are bound to occur, and the more prepared you are for them, the easier they will be to handle. The relatively small amount of time you spend on long-term planning will pay off enormously for the rest of your life, both in terms of dollars and cents and in the security it gives you to know you will be able to deal with almost any twist or turn of your financial fate.
As you found out in the “Defining Your Financial Goals” section, there are short-, medium-, and long-term dimensions to your financial life. While budgeting is aimed at satisfying your short-term goals, you might never get to the mediumand long-term objectives without a comprehensive financial plan.
Many of the aspects of long-term planning will be discussed in more detail later in this book. What follows is a brief introduction to all of the elements you will need to consider in setting up your strategy for long-term success.
