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What is financial planning? Why is it important?

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Why is financial planning important?

Financial planning is all about connecting the money you earn to the dreams you have so that at the end of the day, you achieve your dreams and be content about what you’ve done.

It’s also about doing a few things in the proper way so that your family stands secured just in case you had to say bye to the world a bit earlier than expected…

Financial planning is a necessity because the cost of living is increasing . You just cannot dream of providing a better home for your family or quality education for your children without careful planning of finances. You have to be aware of your present financial situation, status, income level, responsibilities and risk profile in order to draw a financial plan that would work for you.

Now, there’s no point in looking back and feel bad about how your life would have changed if you made some good financial decisions.  It’s not possible for anyone to go back and start afresh, but you can always start now, change few things about the way you deal with money and make sure that you have a better financial platform to fall upon than the one you have right now.

What can financial planning do for you?

#Helps identify financial mistakes –

Financial planning starts with a post-mortem analysis of your finances so far. This helps identify financial mistakes.

By financial mistakes we mean financial decisions which are not fundamentally in line with the accepted financial principles.  A reckless financial decision may have given short term results to someone but that doesn’t make his financial decision right. Decisions should be based on principles. A post mortem analysis will throw light  into such mistakes.

#Helps maximize your savings –

Financial planning principles can give you some tips and rules to make sure that you don’t waste money and instead, save more.

Proper financial planning has helped many to avoid unnecessary expenses and save more by making the right choice of products and services.  Further, it helps you to put your money in the right financial products and earn a decent return In future.

At the end, this process will make you richer than what you really expected to achieve in your life time. If you had the dream of buying a bunch of roses, proper planning will ensure you own a garden.

#Helps you connect to your dreams –

Your dream could be – To by a new car , Setting aside some funds for higher education of children , paying of some debts , planning for retirement or smooth transfer of assets to the next generation..etc

Now, connecting the money you earn to achieve the dreams you have is not easy as you might think because, handling finances in a balanced way takes a lot of planned effort. A  proper game plan has to be made which covers all aspects of one’s financial well-being – from wealth creation to wealth protection. It’s like having a route map that’s in line with your dreams and try to get the best out of your financial resources and stay in control.

#Helps you feel that Life is fair-

Yeah. Haven’t you felt that life’s not fair to all? Some are so rich that even if there’s a huge economic crisis, they’ll still buy the latest Ferrari and sail smoothly.  And, some are so poor – that even a slight variation in monthly inflation will turn their life upside down. We all probably want to fall into that first category of people but that’s not something that can be achieved with some small savings here and there. The money you have must be treated well so that it generates more money for you. This can be achieved only through proper planning.

That’s financial planning for you. It’s nice to see here – you read through these simple lessons just because you want to make a positive and permanent change in the way you deal with money. From our side, we believe that it’s good to teach you how to fish so that you learn how to make good meals for yourself – life long.

 

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