Why is Financial Planning Essential for You?

“A good plan, violently executed now, is better than a perfect plan next week.”
– George S. Patton

If Covid wreaked havoc on your personal finances, then it is high time you considered planning your finances more prudently.

What is Financial Planning?
Financial planning is mapping out simple yet effective strategies to achieve one’s life goals and dreams. Planning is one of our dominant traits; having a financial plan in place helps you control your income, expenses, savings, and investments. Thus, being aware of your current monetary situation as well as your financial milestones is vital.

Why the need to plan?

An adequate amount of money is substantial to enjoy a better standard of living. Unforeseen events come knocking at the door unannounced and hugely impact your finances to the extent of eating into your hard-earned savings. Thus, meticulous Financial Planning is essential to set your finances afloat in tough times and avoid future financial risks for a smooth financial journey ahead.

Let’s delve into some Benefits of Financial Planning:

Build Contingency Funds: One of the best advantages of planning your finances is to raise a Contingency fund which is carefully calculated and set aside for Unavoidable situations like medical emergencies or job loss besides protecting you from taking additional debt. The thumb rule is to park aside an equivalent amount of at least six months of essential expenses as a Contingency fund.

Boost your Savings: Exercising financial planning not only aids in savings but also provides insight into the inflow and outflow of your funds. Thus, allowing you to track your money habits and help curtail unnecessary costs, which in turn further boosts your savings in the long run.

Financial Independence: You can call yourself Financially Independent when you arrive at a stage where you can effortlessly overcome financial hurdles that show up in the face of unfavorable circumstances. Your corpus funds raised with comprehensive financial planning can save you from the burden of borrowing from family, friends, or even financial organizations where payable interest adds to your mounting debts.

A Secured Retirement: Your investment journey is incomplete without a retirement plan. The earlier you start to save, the sooner you can plan to retire. Relying solely on pensions for retirement may not necessarily suffice. Consider inflation too. That is why financial planning serves as a boon to sustaining oneself during retirement by maximizing benefits or gains and creating streams of passive income.

Learnings

As a developing nation, we have evolved in many important areas of life. We have come a long way when seeking expert advice, be it for Medical, Educational, or Employment. But most of us seem to be skeptical about approaching a Financial Advisor or (to be more specific), A Fee-based Financial Expert/Planner for our Personal or professional financial planning, which is crucial for our overall growth and well-being.

So, if you are still a fence sitter, wondering if financial planning is imperative under the guidance of a Fiduciary, then the answer is Yes!

Because the advantages you can enjoy are immense: