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Get Richer In 2018. Start Financial Planning Today!
Jan 3, 2018

Have you noticed how frequently we make a mockery of our own New Year resolutions. Even after trying hard to be serious about it initially?

Typically, it happens when we have promised ourselves to do something that doesn't excite us much. But, something that is annoying now, might lead to serious implications in the future. If you often feel tired and complain about paining knees, perhaps you are overweight.

For you, a regular exercise isn't optional, but an absolute necessity. How many times do you hit the snooze on your alarm in the morning? It is as common as salt to do that when you are supposed to get out of bed and take that brisk walk.

Momentary gratification at the cost of long-term loss never made a man healthy, wealthy, or wise!

Similarly, ignoring personal finances because you are not mature enough to take them seriously is nothing but postponing an important exercise to avoid temporary pain.

Avoiding pain? Of course, it's human tendency.

Financial planning can be a painful activity for many of us because it makes us follow the rules. It imposes do's and don'ts - don't we abhor having conditions imposed?

We don't need any advice on spending money, do we? But when it comes to creating, growing, sustaining wealth, even the smartest investor and wealthiest person requires an adviser. Unless you have wealth in abundance, so much that there wouldn't be any deterioration in your financial position even if you burned millions of rupees every year, you need to create a personalised financial plan.

And here're the 6 most common reasons why one needs to start a financial plan as soon as possible...

  1. To keep track of your expenses:
  2. In today's era of consumerism and with the constantly rising inflation, many people fail to understand how their monthly salaries get extinguished, leaving them with very little or absolutely nothing to save. Impulsive buying and not budgeting runs many into problems in the long run, with not having saved for their children's future needs or even one's retirement. Thus, not keeping track of your expenses and being carefree leads you to bid goodbye to your long-term financial goals, while you may achieve all the fancies of life in the short run.

  3. To manage your liabilities:
  4. Nobody likes to be indebted, but for various reasons most of us borrow. Unknowingly the count of loans swells to an unmanageable level. A financial plan will not only help you untangle from the mess, it will enable you to manage your cash flows better to achieve your other financial goals.

  5. To making an efficient use of available financial resources:
  6. Many households are ignorant about their investment portfolio and often rely on investment tips received from friends and family members. This can result in you eventually investing in an unsuitable avenue. This doesn't only make it difficult to track your investment, but also affects their performance. Such investment portfolios need to be consolidated and re-aligned to meet your financial needs. A personalised financial plan does this job for you.

  7. To ensure your financial goals are met:
  8. As they say, money may not buy you everything in this world, but it does buy things you can't live without. Your dreams often need a monetary support, don't they? Sending your children abroad for higher studies might be an emotional decision for you. But unless you have enough money to your credit, it's will remain distant dream. Children's education/marriage, retirement, and buying a home are common goals.

    To know the best investment options for your child's future, watch this video:

  9. To be adequately insured:
  10. Many of us believe that buying insurance is a waste of resources. But, when unfortunate circumstances come knocking, the right amount of insurance can be a financial boon to you or your family members. While life insurance will ensure that your family members are able to maintain the same standard of living even in your absence, the right amount of health insurance cover can avoid burning a huge hole in your savings that mishaps or unforeseen tragic events could have created.

    However, many people do not understand how much life and medical cover they should acquire. A financial planner will take into account your income, expenses, goals, and host of other aspects to determine the optimal amount of cover both - your life and health insurance needs.

  11. To develop a habit of making regular investments:
  12. You see, to create wealth in the long-term, regular investing along with discipline and determination is the key. Even a child needs discipline and regular monitoring to achieve his goal of being a good student. Hence, as a grown up individual, you definitely need to invest regularly and wisely to meet your financial goals.

    Investing small amounts regularly will also prove to be light on your wallet and reduce the burden of defraying a huge amount in one shot from your bank account. Hence saving and regular investing can enable you to meet all your financial goals in life in a comfortable manner. However, it might be difficult for you to determine the amount you must invest regularly to meet all your goals. A financial planner can help you establish the requisite corpus for meeting your financial goals through planned investments in the right investment avenues.

To Sum-up...

PersonalFN believes change is inevitable and procrastination is our enemy. Please recognise this; achieving financial nirvana isn't as tedious or nerve-wrecking as it is often made out to be. To get there, all one needs to do is:

  • Construct a viable financial plan; and
  • Be determined about achieving it

You can systematically grow your wealth under the Bodhi tree of a Certified Financial Guardian. His/her financial plan will guide you to transform your dreams into goals, and goals into an actionable plan, and plans into a reality.

An annual review (or bi-annually in some cases) will increase the possibility of fulfilling your financial goals by allowing you to incorporate any personal or economic changes in your financial plan.

So, get your financial health check-up done today and see where you stand! For any professional help, get in touch with a Certified Financial Guardian in your vicinity, or you can reach out to PersonalFN on 022-61361200 or write to info@personalfn.com

Happy Planning!

This article first appeared on PersonalFN here.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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