What is Financial Planning:- To understand the meaning of Financial Planning, let us first understand the different meaning of the two words, Financial means- Money, or Finance and Planning – making plans.
Financial planning means that, to make a plan to fulfill all kinds of finances in your life, financial needs
And in simple words,
“Planning to meet financial needs is called financial planning”.
Now let’s try to understand some financial needs also, what are the types of financial needs and what is the need to plan them,
Financial Needs, such as –
Regular Income for Daily Needs – Regular income for regular expenses,
Security of Income – Security of income, so that we continue to receive regular income (Income after retirement)
Emergency Funds – FUND (money) required for any type of emergency or event, eg – financial crisis, illness, accident, etc.
Short Term and Long Term Life Goal – Own home, own car, good education of children, and their wedding, going to visit country or abroad, and more.
In this way, financial needs may vary from us all individually, but we all need money related needs.
For every person, fulfilling his financial needs is a goal of his life which is also related to his personal success.
Now in such a situation, you will also have some similar financial needs and this financial need always motivates us to work and earn money and that is why we all work continuously from the beginning of our career till retirement so that we can fulfill all these financial needs.
But the important question is that-
Do we all get success in fulfilling the financial need?
– So the answer is – “No”,Only 5% of people achieve financial success, and the remaining 95% fail, and get caught in a Rat Race.
Why is creating a financial plan important?
I do not need to tell you how much planning is important for success in any work – Being Prepared is half the battle won, ie if the preparation is good then the fight Half of the win is already guaranteed.
So, in this way our financial success also depends very much on whether we have exactly the right financial plan or not.
To get financial success, it is very important to have a financial plan.
Benefits of Financial Plan:- Apart from this, if you talk about the benefits of financial planning, there are many benefits of financial planning.
Such as –
1. By doing financial planning, we can control our non-essential expenses, and in this way we can increase our cash flow income positively.
2. You can maintain a proper balance between your income and expenses.
3. With the help of a financial plan, we can invest our savings money as best as possible such investments which have the least risk and we get maximum benefits which are sufficient to meet our economic goals.
4. With financial plan, we get help in completion of proper tax planning, retirement planning, and all big and small financial goals.
5. With the help of a financial plan, we can provide a financial security to our family and the future of children with appropriate insurance cover so that in case of any untoward family members do not have to seek financial help from anyone else.
6. We all want to invest from the best, in such a way, by investing according to financial planning, we can easily choose the best investment options for us.