by Sanjeev Kumar Gopalakrishnan, Financial Planning

Benefits of having a Financial Plan

Financial Planning is a process which helps us make sensible money decisions. You can build a plan on your own, or if your needs are complicated, you might take the help of a Financial Planner. Here, we list out a few of the many benefits you receive when you invest the time, energy and money to develop your own personal financial plan.

Helps to achieve Life goals.

We all like to be completely free from debt. We like to retire early. We like to build our dream home and to pay for our children's college education at a top school. We like to start our own business. Financial Planning is the most efficient way to be followed for achieving all these goals in Life.

Provides an analysis of your Financial status.

An analysis of your Cash flow, Net-worth, Investments, Income Taxes, Liabilities, and Insurance is one of the most important steps of Financial Planning. It gives an assessment of our current financial picture. It also helps us understand whether our goals are realistic in comparison with our Financial data as well as the time frame. Click here for a quick Financial Diagnosis.

Cultivates Financial Discipline.

We don’t get serious about our spending habits and investment decisions until we define our Goals. Identifying one’s Life Goals is important in Planning their Financial Life.  Financial Planners usually start their official discussion by asking our Life Goals. Starting Financial Plan early will help us to define our Life Goals and also to nurture discipline in handling your Finances.

Financial Planning maximizes your money.

An outside expert who looks at your finances may  find new opportunities to save money that you hadn’t thought of. Hence, Financial Planning assures more ways to maximize your money, such as increased income, reduced taxes, best investment options, effective budget, Money saving tips and effective Debt recovery.

Increases your Financial Literacy.

Financial planning helps you  to understand how each financial decision affects the other areas of your finances. It will improve your Financial Knowledge. You will get more exposure to obscure Financial Products and Investment options.

Reveals the risks that you don’t identify.

Checking risk capacity is included in a financial plan. Certified Planners are experts at defining the risk one could face in their Investment decisions.  Advising investment options matching to the risk tolerance of an investor is very important in Financial Planning.

Allows you to measure your progress on your goals.

After making a financial Plan you can set up measurable goals such as regularly contributing money towards either savings or debt over a period of time. You can track how close you are to your Life Goals.

Saves your time.

The feeling of your money and your life being in harmony is wonderful. Imagine knowing you are on the right track in your financial journey and not calculating your expenses every day. Once you have created your personal financial plan, you'll no longer need to imagine.

Makes you more confident and comfortable about your money.

Those with a Financial Plan are also more likely to say they are living comfortably. You will be educated to face a worst case scenario, financially as well as emotionally with an efficient emergency Fund Planning. Being confident in every stage of life is important. Achieving life goals and being prepared for an early retirement will definitely provide you peace of mind.

 About The Author

Sanjeev Kumar G, an IBS Chennai Alumni, is a Certified Financial Planner (CFP) from India, since 2005. He has 22 years of experience and is an expert in various personal finance areas like portfolio construction, investment research, life insurance and financial planning.


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