Plan Wise, Plan Ahead
July 13, 2021“Dreaming of the trip alone does not take you on the journey. It’s the planning that actually makes it a reality”.
We have already seen Savings as the first step to financial fulfilment. But just saving a certain amount of money might not be sufficient to take our lives ahead. Normally we save money with some goal or the other in our minds – be it your children’s education or marriage, your dream home/car, retirement planning or even a much-longed overseas vacation. There should be a systematic approach to achieving your goals. That is what we call Financial Planning.
When you have proper planning, you will have better control of your income and expenses; thereby helping us achieve our goal in an optimal fashion. To answer the question of why planning; we need to familiarize ourselves with the concept of inflation.
Let us see with an example. We have a goal to buy a car for 6 Lakhs and start saving towards the goal. It may take around 3 to 4 years to achieve the 6 lakhs just by saving. But by that time; the amount of cars would have risen to 8 lakhs and we are still short by 2 lakhs and thereby reducing our purchasing capacity.
This is why financial planning is so crucial to us. During planning, factors like inflation, expenses, income, investments etc. are considered and this gives us a proper insight on how and what to do in order to achieve the goals. This way, financial planning plays an important role in each and every person’s lives.