What is Financial Planning ?
What is financial planning?
Financial planning is a methodical process for achieving one’s objectives in life. A financial plan serves as a roadmap for your financial future. In essence, it assists you in maintaining control over your earnings, outlays, and assets so that you may manage your finances and accomplish your goals. A closer examination of the aforementioned examples reveals that they are all related by the same element: money. To fulfil your goals and desires, you need to have enough money. More essential, you must have money when you need it.
Setting essential financial goals for your life
It is crucial to consider personal financial planning in India. It’s not only about saving more money and spending less.
- Retirement planning:
Your retirement may not come until 25 or 30 years from now. However, that does not imply that you plan for it after retirement. You must begin constructing your safety net immediately if you want to live a happy and comfortable retirement. Early life planning can protect you from financial uncertainties in the future. Additionally, if you begin investing early, you will benefit from the force of compounding, which will help you amass a sufficient corpus over a 25–30-year period.
- Child’s education:
Not just in India, but all throughout the world, education has increased in price significantly. And this expense will continue to climb in the future. Because of this, you must begin planning as soon as your child is born. Determine how much you want to make, then start investing in long-term investment opportunities that will enable you to do so. If you need help on how to move forward, you can speak with a financial advisor.
- Saving tax:
You presumably pay a sizable amount in taxes each year. But you can now lawfully cut your tax expenses. The Indian Income Tax Act includes a number of features that allow persons to pay less in taxes. Planning ahead for your taxes in advance, you can identify the best avenues to invest your money and reduce your taxable income. Mutual funds provide a tax-efficient avenue for investing in your life goals.