After friends and family the next most important thing is money. As a result, proper money management is critical in one’s life. Therefore, financial planning importance is extremely high in your life as it aids in good money management.
In simple words, Financial Planning provides a road map to one’s financial life and makes provisions to fulfill Financial dreams in shortest possible time.
Financial planning also helps you to define and understand your goals, quantify the goals ( in money terms)considering inflation and other important factors.
Table of Contents
What is Financial Planning?
Financial Planning is Step by step approach to meet one’s life goals. It helps you to be in charge of your investment.
It’s benefits can be understood from the client’s statement- that he wasted a lot of time earlier. He wished, he could have started it earlier.
Now, he feels relaxed and confident of achieving his goals confidently.
Financial Planning Importance
I wish I could send my daughter abroad to study but that might be very costly. Can I send her and afford her education cost with 2000 monthly Investments.
I have many insurance policies but I am not sure what amount I will get from these policies. Will I be able to live a comfortable and relaxed life once I get retired taking the maturity from these policies.
I have already invested in PPF/ PF, insurance policy and a piece of agricultural land. Will I be able to pay my loans in 20 years? Is there a faster way I can repay my loans?
I’ll be getting a bonus in May this year, should I prepare my loan or invest this amount?
I wish I could afford a long vacation trip abroad. Will my accumulated Corpus be enough for me for my life?
These are not aspirations but you are goals, desires and dreams and I ( Mamta Khanna) as a CFPCM can assure you confidently that your dreams and aspirations can be answered and achieved by financial planning.
The Planning benefits lies in fulfillment and achievement of these aspirations and goals confidently.
Why Financial planning?
I always say financial planning is required because you can’t go back in time and correct those investment mistakes.
As once the time gone never comes back. Similarly your hard earned ( Saved) money will give you better returns as it could have.
If you come to know about the inadequacy of money when it is required most is very painful. Therefore it is better to have a financial plan in your hand.
Importance of financial planning
The importance of Financial planning lies in improving the Financial life of people
- Setting up SMART Financial Goals
- Building a safety net
- Make a Blueprint to achieve these life goals
- Eliminate useless investment
- Reviews the goal achievement periodically
In simple words Financial Planning tells a individual, how he can proceed further
- Where to reach
- How to reach
- Where you need to invest
- How much you need to invest
- How can you achieve your Financial life Goals
- The benefits does not end here, apart from all benefits it help you to maintain money for contingencies, reviews your life and medical insurance, make provisions to pay loan faster, reviews existing insurance, plan retirement etc.
Every second person is tensed over his investments. How are they performing? Does he need to do more, invest more but in lack of knowledge, research and time it becomes difficult to understand and comprehend the meaningless investment which might not give you good returns in long term.
Help you to build a safety net so that you do not lose on account of emergencies medical reasons and other calories if one is plant when he can live well
Financial Planning helps you in every aspect of your financial life from safety to money preservation to reducing loan faster to build wealth over a period of time. It also help you to realize your dreams in a shortest possible time.
For example if I suggest a 35 year person with the salary of Rs 100000 per month to make a SIP of 70000 for month to have good retirement corpus than obviously it will be difficult for him.
But instead if I make a way for him to start a monthly investment with 20000 and increase the SIP on annual basis
or
Make a additional contribution each year or after six months.
This will reduce the pressure and anxiety for the person and help him to achieve his goals comfortably and confidently.
REMEMBER, One can reach his destination,
Only when he knows where to reach.
Start your Financial Planning Today itself.
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What is Financial Plan & How it works
A Financial Plan is 10-15 page excel based Financial Blueprint plan which caters the following aspects
- Your net worth calculations and how to improve/increase it over a period of time.
- Cashflow till working life
- Retirement Planning
- Child Education Planning
- Child/Your wedding Planning
- Goals Planning
- Investment Planning
- Tax Planning
- Estate Planning
- Insurance Analysis
- Loan Analysis
- Existing Investment Analysis
- Portfolio Review
- Overall Instruction summary
- Execution of Plan
- Periodic Review of Plan
