What is Financial Planning ?
Financial Planning is not just saving the money. Majorly it includes to ensure adiquate liquidity of cash all the time. It includes good appreciation to your savings.
Who requires Financial Planning?
Everyone needs financial planning whether your are – YOUNGSTER, A Working Adult or a retired person.
What are the types of Financial Planning?
Following are the types of financial planning –
- To ensure ample liquidity of cash.
- To give a good appreciation to your savings.
- To plan your tax liability effectively.
- To make sure you have enough money to live life gracefully after your retirement.
- As a responsible parent, need to keep adequate corpus for the future (higher education, wedding etc) of your children.
- Life is uncertain and insurance gives you financial liberty to cop up with any unpleasant event.
What are the benefits of Financial Planning?
Following are the benefits of Financial Planning –
- A good financial planning gives you protection & security for your future.
- It helps in making good decisions.
- It helps you to allocate your resources efficiently.
- A better financial planning leads to better standard of living.
How to create a Financial Plan?
Following are the steps to create a better financial plan –
- Evaluating your income (From all income sources – Salary/Rent/Farming etc)
- Assessing your expenses (All Bills/Ration/Education Fee/EMIs etc)
- Decreasing your high interest debits. (Credit Card debt etc)
- Identifying your low return generating assets.
- Optimize your investments. (By making in better ROI investment tools)
- Monitoring, Adjusting and modifying the plan regularly. (In any investment – Exit timing is as important as entry timing.