As a mentor in the field of education, we feel that the parents do not do any financial planning to provide the good and quality education to their ward. They do discuss it after passing the time. We not only urge the parents to do Financial Planning but also suggest some financial plans to meet their requirements. Wonderful results are there.
Financial planning is a calculative vision and approach to meet everyone’s life goals. A financial plan acts as a guide and a mechanism as we go through life’s journey. In fact, it helps us to control our income, investments, and expenses so that we can manage our money and its monetary targets.
If we take a closer look, we’ll find that there is one factor that connects all of them i.e. MONEY. We need to have an adequate amount of money to fulfill our goals and desires. Another important factor is that we need to have money at the RIGHT TIME in time.
Objective and Benefits of Financial Planning:
There are numerous direct benefits of financial planning. It helps us to:
Increase our savings: It may be possible to save money without having a financial plan. But it may not be the most efficient way to move further. When we derive a financial plan, we get a good deal of insight into your income and expenses. We can track and cut down our avoidable expenses consciously. This automatically increases our savings in the future.
Have a better standard of living: Most people believe that they would have to sacrifice their standard of living if their monthly bills and EMI repayments are to be addressed. On the other hand, with a good financial plan, we would not need to compromise our lifestyle. It is possible to achieve our goals while living in relative comfort.
Think for the best and ready for the worst: Creating an emergency fund is an important aspect of financial planning. Here, we need to ensure that we have a fund that is equal to at least 12 months of our monthly salary. In this way, we don’t have to worry about procuring funds in case of a family emergency or a job loss. The emergency fund can help us pay for spurting expenses at that time.
Maintain peace of mind:
With adequate funds at hand, we can cover your monthly expenses, invest in our future goals without worry. Financial planning helps us to manage our money efficiently and to enjoy peace of mind.
Financial planning for Good Education:
The importance of personal financial planning in India cannot be ignored. It is not just about increasing your savings and reducing your expenses. Financial planning is a lot more than that. This includes achieving your future goals, such as:
Child’s education
Education has become very expensive, not only in India but across the world. And in future, this cost is only going to rise. This is why it is necessary to start planning from the moment your child is born. Calculate how much you wish to earn and start investing in long-term investment avenues that can help you achieve this goal. You can approach a financial advisor for advice if you are not sure how to proceed further.
Student College Education
Imagine a father who has taken an education loan to finance his son/daughter’s college education. At the same time, he is also saving money to fund his retirement that is a couple of years away. But suddenly, a medical emergency occurs in the family. Unfortunately, the lack of medical insurance coverage means he has to pay for medical expenses out of his savings. This depletes his retirement corpus and increases his financial burden. Many people face such situations. And while it is good to hope for the best, it is necessary to plan for the worst. A sudden job loss or an unexpected medical emergency can shake up your finances considerably. This is why you need to have an emergency fund to deal with such issues. Financial experts advise investors to keep an amount equal to 6 months’ salary as a contingency fund. This can be invested in a liquid fund so that you can access the money quickly in case of an emergency.
