Every family saves and grows money for its future, but it can be much more effective when they are clearly associated with life goals and events. Saving or investing without a clear purpose can leave you unprepared for important milestones in your life. A plan without direction is like stepping into an unfamiliar place blindfolded—you don’t know where you’re heading.
In this blog, we will walk you through about financial planning – what is it, life events you need to focus on financially and benefits of financial planning.
What is financial planning?
Financial planning is the process of managing your finances to achieve specific life goals and ensure long-term financial security. It involves assessing your income, expenses, savings and investments to create a secure financial future.
Through proper financial planning you can also handle unexpected challenges in life without having to worry about. By taking control of your financial journey early, you can reduce stress, grow your wealth, and achieve greater peace of mind.
7 key life events that require financial planning
Not all people have the same aspirations in life and lead their lives in the same way. Irrespective of how varied your life is, a financial plan always helps. That said, these are some milestones in life that most people have.
- Higher Education:
In India, most parents pay for their children’s education, but not all of them have the resources to pay completely for higher education. Having an education focused savings account or SIPs on child education can help. - Wedding:
Most Indians dream of having a big, fat wedding. If you are one of them, having a savings plan is essential. There are several savings plans just for weddings in India. Opting the one that makes most sense to you is the right choice here. - Children:
The next milestone in most Indian families is having a child. Children are most certainly a bliss but raising them is expensive. Most parents in India pay for their children’s education and also their wedding. Financial products like Child insurance plans and Mutual Funds can help you meet your child’s financial needs - Medical emergencies:
Not all events in life are something we look forward to. Medical emergencies can be unpredictable and ruthless. Being prepared for these incidents can save you and your family from financial turmoil. Health insurance plans cover a variety of expenses which can save you a lot of money. - Buying a house:
Buying a house is a life decision that requires careful planning. It can be overwhelming, especially when you are buying a house for the first time. Taking the right financial steps can ease your process. - Starting a business:
Starting a new business can be thrilling and a financial plan for it is a must. Most startups require loans and investors, having a viable plan is crucial for the success of your business. - Retirement:
You have worked hard for yourself and your family. With proper planning you can spend time with your loved ones, travel or fulfill your other commitments. There are several retirement focused products like Public Provident Fund, National Pension System, Employees Provident Fund, Life Insurance Pension plans etc.
Benefits of financial planning
Having clarity about your finances is critical for your overall financial well-being. A financial plan helps you realise your financial security. The plan creates a blueprint for you on how to save, invest and spend to reach your goals and mitigate risks.
Here are some benefits of financial planning:
- Improved financial understanding: With a plan, you are always aware of your current financial standing and how well you are doing. You can be open minded about an investment opportunity and emergencies won’t trouble you, since you are prepared.
- Better standard of living: When a financial plan is developed and executed properly it can grow your wealth. You will be able to generate multiple sources of income for your family. You can pay off your loans without having to compromise your daily expenses.
- Financial security: Business owners or self-employed individuals do not have salaries, they depend completely on their business income. With a good financial plan you will be able to cover your monthly expenses, manage when your business does not profit well.
- Early retirement: Most people dream of an early retirement and it can be possible with financial planning. You can have early retirement as your priority and work your finances accordingly.
Conclusion
These are the major life milestones you need to be prepared. This blog only provides a structure to know what to look forward to prepare yourself. Seeking advice from financial planners and advisors can help you better in navigating financial planning. Adyanth Wealth can help you live your dreams by aligning your investment with your life goals.
