BBI of Chicago
The Importance of Financial Planning for Society
By: Eduardo Emilio Baade.
According to Greek philosopher Plato, “The really important thing is not to live, but to live well.” For him, the quality of life is so important that it goes beyond the value of existence itself. However, in Brazil, thousands of people have their well-being affected by the lack of financial planning, a rarely addressed issue in the academic curriculum due to ignorance or unfamiliarity. This fact is very relevant in the current scenario of the Brazilian economy, where we have recurrent inflation, causing our money to lose its purchasing power over time. Due to all this, planning for the future, having control over expenses, knowing how to negotiate debts, understanding the cost of living, saving for dreams, setting goals, and investing are some pillars for a better quality of life. When we spend our money without any control and with the ease of anticipation of dreams, through installments, or easy credit, we quickly find ourselves in a situation involving increasing debts. In addition, the lack of mastery regarding negotiation practices within financial planning leads thousands of people to fall into scams and suffer serious material and psychological damage (LANG; MAGALHÃES, 2019).
Therefore, we need to do our financial planning as carefully as possible. We should treat our finances like a company. We need goals, inputs and outputs, negotiation, information flow, and cash flow. We need to know exactly where the money is coming from and going to, in addition to understanding our current financial situation and living conditions. Using these simple metrics from the corporate environment, we can establish and achieve goals of when to save, when to spend, and, especially, when to invest. Because saving shows our ability to maintain a standard of living in the future, spending is related to our behavior and knowledge about money, other than events we have no direct control over. Investment decisions can lead you to a standard above your current conditions (NIGRO; THIAGO, 2019).
Using yet another two variables of time and money, which are inversely proportional in financial planning and concerning your future or the realization of your dreams, an early start is a big catch. This, and our ability to save during our entire life, will lead us to a future with fewer worries because the more time we have, the less effort we need to reach that big dream or even have a more dignified retirement.
Given the above, we need financial education to reach Brazilians earlier and earlier. Because only through education we can form citizens who can properly manage their resources. Be it through a bill to have mandatory financial education classes in the school curriculum or private initiatives to promote personal finance projects in communities to reach as many individuals as possible. By taking this knowledge about financial planning to communities, we can even change the Brazilian cultural course. From one where we will leave an indebted population, which constantly seeks the state as its financier, through aid, to individuals who seek their financial freedom on their own, know how to manage their finances, take responsibility, and are concerned with the present and the future. It would make Brazil's population and the country a stronger nation economically, thus bringing the maxim pointed out by Plato.
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S. CLASON, George. O Homem Mais Rico da Babilônia: Rio de janeiro: Harper Collins, 2020. 157 p.
LANG, Rodrigo; MAGALHÃES, João. Negotiation MAP: o framework de negociação que vem revolucionando o mercado. [S.l.]: Business Behavior Institute. 2019. 52 p.
MARTELLO, Alexandre; Mercado financeiro eleva estimativas de inflação, Portal G1. Available at: <https://g1.globo.com/economia/noticia/2021/10/04/mercado-financeiro-eleva-estimativa-de-inflacao-para-2021-e-2022.ghtml>. Accessed on: Oct. 06, 2021.