Why is it Important to have a Financial Plan of your own

37050294_s

The more customised and monitored it is, the better. Of the many things that one takes for granted in Life, personal finance is one area that requires constant attention. Just as seeds, pupa and ideas need attentive nurturing to bloom into trees, butterflies and path-breakers respectively, so do the five siblings – Income, Expenditure, Saving, Insurance and Investments. After all, Rome did not grow in a day and neither will your own home. But it can grow and flourish over time, when finances are well planned and monitored. Financial Plans help in many ways

  1. A Financial Plan gives wings to your dreams – by building financial security, you allot more and more spare time towards individual life passions
  2. A Financial Plan makes sense of the various options available, and customises the myriad products according to what fits your universe. It is best to understand finance, in the way you want it to function for you.
  3. A Financial Plan measures and monitors your individual assets and liabilities, across the various stages of life. Right from being a student, to an individual working professional to having a home, family and children, their education and finally your own retirement.
  4. A Financial Plan constantly shows you that Finances, Financials and Financing are all means to an end and rarely the end itself.
  5. A Financial Plan reassures you about what is actually enough for you, by classifying individual requirements into Needs, Wants and Luxuries. After all, you can do without the 2nd, aspire for the 3rd but cannot live without the first!!

In financial terms, we can break a plan into three pillars – Protect, Save and Grow. To be sure, it is best to trust yourself to make your own Financial Plan. Having made one, it is always wise to show it to an expert (or a Certified Financial Planner) before swinging into execution mode. By the law of probability, chances of an error come down drastically with each additional person reviewing it. It is of course wise to limit this to a maximum of two or three trusted persons since you don’t want to have private data passed around.

Advertisements