What is Financial Planning?

Let’s start our journey of Learning about Financial Planning.

What is Financial Planning?

Financial Planning is basically a process of ascertaining the financial goals of a person that will arise at different intervals in his life, also gathering the information about the person’s current financial situation like his/her assets, liabilities, income & expenses. After that, making a proper plan to invest¬†those assets and future income’s in such asset class that will help him achieve his financial goals in life.

Objective of Financial Planning

The objective of financial planning is to ensure that the right amount of money is available to the person at the right time to help him meet his different financial goals in life.

Different Financial Goals can be like:

  • Saving Money for Buying a Car costing Rs 5,00,000 after 3 Years.
  • Investing Rs 15,00,000¬†for Child’s Higher Education after 10 years.
  • Investing Rs 40,00,000 for Child’s Marriage after 15 Years.
  • Investing Rs 2 Crore for Your Retirement after 30 Years.
  • Protecting You & Your Family with adequate Insurance.
  • Investing to save taxes in an efficient manner.

Financial Planning is a broader term than just an investment advice and subsequent placement of funds. It is comprehensive planning which covers all aspects of a person’s financial well being from wealth creation to wealth protection, selecting products to suit specific needs, monitoring and reviewing financial situation on a regular basis and revisiting the plan if required.

Financial Planning is simply arranging finances keeping in mind the various financial goals to be achieved. i.e. To take a goal oriented approach and mapping out appropriate strategies.

Financial Planning also includes:

  • Using Monthly Budget to keep finances on track.
  • Saving & Investing Money
  • Making Decisions about the Job or Business & it’s benefits.
  • Getting the most out of other financial resources like Insurance and Employer Provided Benefits.
  • Controlling unnecessary expenses and staying out of Debt.
  • Estate Planning for Wealth Transfer to next generation.
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