Did you know that only 10% of people in India have a comprehensive financial plan in place? Despite the importance of financial planning, most people in India do not have a clear understanding of their financial goals or a plan to achieve them. This can lead to financial insecurity, stress, and missed opportunities. For example, did you know that if you start investing just Rs. 5,000 per month at the age of 25 and earn an average return of 12%, you could have a corpus of over Rs. 1.3 crore by the time you turn 50? By contrast, if you wait until the age of 35 to start investing the same amount, your corpus will be less than half that amount. The good news is that it’s never too late to start planning for your financial future.
Let us explore the benefits of a goals-based financial plan and how it can help you achieve financial success:
A goals-based financial plan provides clarity on what we want to achieve financially. It helps us identify our financial goals, whether it’s buying a home, funding our children’s education, or saving for retirement. With a clear understanding of our financial objectives, we can create a plan that is tailored to our individual needs.
A goals-based financial plan also helps us prioritize our financial goals. We may have multiple financial objectives, but not all of them may be achievable at the same time. With a financial plan in place, we can identify which goals are most important to us and focus on achieving them first.
A goals-based financial plan also helps us budget effectively. With a clear understanding of our financial goals, we can allocate our resources accordingly. We can identify areas where we can cut back on expenses and redirect those resources towards achieving our financial objectives.
A goals-based financial plan can also help us invest more effectively. With a clear understanding of our financial goals, we can identify the types of investments that are most suitable for us. We can also create a diversified investment portfolio that is aligned with our financial objectives.
5. Risk Management:
A goals-based financial plan also helps us manage risk effectively. With a clear understanding of our financial goals, we can identify the risks that may impact our ability to achieve them. We can then take steps to manage those risks, whether it’s through insurance or other risk management strategies.
A goals-based financial plan is not set in stone. It is a dynamic document that can be adjusted as our financial situation changes. As we achieve our financial objectives or encounter unexpected challenges, we can modify our plan accordingly.
7. Improve Financial Discipline:
A goals-based financial plan can help us improve our financial discipline. By having a clear understanding of our financial goals and a plan to achieve them, we can avoid unnecessary expenses and stay focused on our objectives.
8. Measure Progress:
A goals-based financial plan helps us measure our progress towards achieving our financial goals. We can regularly review our plan and track our progress to ensure that we are on track. This can help us stay motivated and make necessary adjustments to our plan if we are falling behind.
9. Avoid Impulsive Financial Decisions:
With a goals-based financial plan in place, we are less likely to make impulsive financial decisions. We can refer to our plan when making financial decisions and ensure that they align with our long-term financial objectives.
10. Improve Financial Literacy:
Creating a goals-based financial plan can also help us improve our financial literacy. By learning about different investment options, risk management strategies, and financial planning concepts, we can make more informed financial decisions.
11. Achieve Financial Independence:
Ultimately, a goals-based financial plan can help us achieve financial independence. By setting achievable financial goals, creating a plan to achieve them, and staying disciplined, we can build the financial foundation we need to achieve financial freedom and live the life we desire.
A goals-based financial plan can be a powerful tool to help individuals achieve their financial objectives. A goals-based financial plan can help individuals make informed financial decisions and stay on track towards achieving their goals. It also offers flexibility, allowing for adjustments as one’s financial situation changes. Perhaps most importantly, a goals-based financial plan provides peace of mind, knowing that one has a plan in place to achieve their financial objectives. Whether it’s buying a home, funding a child’s education, or saving for retirement, a goals-based financial plan can help individuals take control of their financial future and work towards achieving their dreams.
These tips are brought to you by the Expert Financial Planners at HappyWise Financial Services.
For any assistance in investment planning for your financial future, feel free to reach out to the Experts at HappyWise on Whatsapp or Email.