Your future deserves more than assumptions –
A Financial Plan!
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Plan your retirement corpus and secure your future
Plan education expenses and secure your child's future
Plan your dream wedding expenses or set a savings goal
Plan your home budget and start investing confidently
Before we begin, let us ask you a question: let’s say you have been yearning to purchase a car for years, and you suddenly win a lottery of Rs 3 Lakhs. What will you do? Will you immediately rush to the showroom, pay the down payment, and grab the keys to your dream car? Or will you wait, analyse your income and expenses, think about your future, see if you can afford the car at that time, and then make a move? Well, if you fall into the latter category, congratulations, you are already on the verge of understanding the concept of financial planning. However, if you are not, trust us, you need it the most!
Do you have dreams that demand a legitimate corpus? If yes, then how do you spend your monthly income? Are you able to save a specified amount every month, or do your expenses exceed it? These are the questions that you must ask yourself periodically for a wealthy future! Only then will you be able to manage your finances.
Financial planning helps you curate a secure future. It involves assessing your current financial situation, setting clear goals, and allocating your income accordingly. Once you acknowledge these things, you can then curate actionable strategies through budgeting, savings, managing risk, and planning for your retirement, along with your short-term financial goals.
Asking why financial planning matters is equivalent to questioning why you need a balanced diet. To live a better, peaceful life, right? Although life is uncertain, financial planning makes it bearable. It offers you a roadmap to achieve your short-term and long-term goals. Once you understand your objectives, you gain better control over your finances, which helps you save for the future and prepare for predicaments. It also encourages disciplined saving habits and assists you in paying off your debts. With a strategic plan, you can even retire early.
Everybody has certain financial goals, but only those attain it who know how to align expenses with their financial condition, build an emergency fund, have legitimate investments, and are willing to secure their present and future. Therefore, if you are willing to do the same, then start making a financial plan today!
John Doe and his friend work in the same company, and they have almost the same salary, but different spending habits. John Doe is strict with his finances; he ensures that he sets aside money for savings, limits his expenses, makes a financial plan and follows it. On the contrary, his friend is a religious follower of the phrase “We only live once,” and he spends his money as he wishes without saving anything for emergencies.
Who do you think is smart?
John Doe, obviously! But have you ever wondered why? What will he gain with this financial planning? Well, if you haven’t, we’ll break it down for you.
Benefits of Financial Planning
There are an endless number of benefits of financial planning; we are tabulating a few for you:
When you are serious about your finances, you sit down with a clear mind to figure out your short-term and long-term financial goals. It doesn’t just help you with recognising what you want from your life, but it also aligns your income with your expenses, sparing you the burden of unnecessary expenditure.
You will get a broader picture of your finances when you categorise your short-term and long-term financial goals. Because then you will start evaluating your income, expenses, and debts, collect all the insurance papers, and work on accomplishing your financial goals rather than spending your money based on guesswork.
Can you mitigate risk without knowing what it actually is? No, right? Creating a legitimate financial plan assists you in identifying potential perils, such as market risks and unforeseen emergencies.
As we stated before, there are multiple market risks which can be mitigated through strategic financial decisions; one of them involves establishing contingency funds. Setting aside some amount as your emergency fund safeguards you against unforeseen uncertainties, so you don’t have to mortgage personal assets.
We are sure that, after COVID, everybody has learnt the importance of saving some money for sudden emergencies. Curating a legitimate financial plan offers you the flexibility to adapt to market changes.
A detailed financial plan prepares you for sudden market changes or personal commitments.
Why do you work hard all the time? To live your dream life, right? But is it really worth it if you don’t have peace of mind? Imagine roaming in a lavish car, living in a comfortable home, and purchasing branded clothes, but your financial future is not secured? Not having any monetary backup if you fall into any unavoidable crisis? We don’t even want to picture it, so avoid making reckless financial decisions. Curate a detailed financial plan today and follow it with discipline.
Your peace of mind should be at the top of your priority list!
There are several benefits of financial planning. It not only assists you with recognising your financial goals but also offers you security and peace of mind. Most importantly, you stay on track as you start aligning your expenses with your financial situation.
Start today. Your future self will thank you!
When do you think the financial planning starts? From the moment you start earning, or from the time you begin receiving pocket money? Some of you might agree with the former option, and if you are one of them, think again!
Why? Inculcating the habit of managing finances from the moment you’re eligible for pocket money instils the practice of saving money, which upholds you in the future.
But the question is which future? For your adulthood or retirement? Won’t you have different financial goals as you grow up? And are your minimal savings enough?
No, right? You will require proper financial planning at every step of your life. But have you ever wondered how you will do that?
If not, don’t worry and scroll down. We have simplified financial planning for different life stages.
These are the years when you wake up early, attend school, engage in multiple activities, and learn something every day; some of you even receive monthly pocket money. Utilise your ‘learning years’ in acquiring knowledge about finances, like assimilating information about basic financial products, developing saving habits, and working on becoming financially literate.
Don’t get overwhelmed with adult money. When you grow up and start earning, learn to save a portion of it; instead of buying Labubus. However, adulthood isn’t limited only to savings; it’s beyond that.
Evaluate your income, expenses, and budget your finances accordingly. Create emergency funds, ensuring they cover a minimum of six months of your expenses. These are the years when you are introduced to credit cards; use them wisely, and keep your credit score healthy. Begin investing while acquiring basic health or life insurance.
When you go from one to two and start your family, your expenses become fourfold. Everything falls on your platter all at once; however, the transition will only feel smoother if you are already prepared. It’s the time when you need to restructure your budget for your expanding family.
If you already have a home, well and good, but if you don’t, it’s the time to plan for a house loan and other huge expenses like children’s education and early retirement.
You won’t like the burden of loans till your old age; so ensure to clear them off. These are the years wherein you shouldn’t really be an aggressive ‘risk taker.’ Shift to balanced or conservative investments and ensure to keep an emergency fund for immediate financial assistance.
Note: Always keep a significant amount of money for medical emergencies.
Finally, the years, wherein your body demands rest, and your soul seeks peace. Ensure that you regularly budget your funds, control your spending habits, and focus on preserving your estate.
Since you won’t be working, it’s better to rely on pension schemes. So, you will save yourself from emotional and financial turmoil if you plan your finances from the very start.
You only have one life, so make sure that you make the best of it, and only healthy saving habits, budgeting, and smart investments can help you achieve that. For starters, you can follow the 50,30,20 rule: 50% needs, 30% wants, and 20% savings. Ensure to review your finances periodically and adjust accordingly.
Your needs will change with time, and so should your financial strategy. Start today!
Everybody has certain financial goals, but is achieving them with just savings possible? No, right? Imagine setting aside Rs 6000 for 5 years to purchase an Alto. Will you be able to save enough money? Obviously, No. And that’s why there’s one SIP for each financial goal. Whether it’s a car, a house, education, or any short-term or long-term financial goal, all you have to do is invest strategically to attain what you desire.
Don’t worry, we will simplify it for you.
If you want to plan your child’s education and require around 20 - 30 lakhs after 15 years, prefer investing in equity funds. Why? Equity funds offer you better returns if you give them the intended time, which is typically longer than 8 years. Note: Ensure to calculate the future education cost, taking inflation into account.
Take the step to invest through SIPs and get over the dream of a perfect vacation; live it. To plan a vacation, consider investing in short-term or medium-term debt or hybrid funds, depending on the timeline. If you plan a trip after 3 years, then investing in debt funds would be ideal; however, invest in hybrid funds if you are extending it to 4-5 years.
People not only invest their money but also their lives, time, and other financial goals to purchase a house. Don’t be like ‘people’; plan smart and invest strategically. You can invest through SIPs in hybrid funds for 4-5 years to pay for the house’s down payment.
Otherwise, if you are in your 20s with a stable income and wish to buy a house after 15-20 years, invest in equity funds.
Buying a car is a dream for many, but saving money for it is often tedious; however, it won’t be burdensome if you invest through SIPs in Mutual Funds. Your investment will largely depend on the time when you require a car; if you want it after 4-5 years but have a very limited amount for investments, then you can invest in hybrid funds and save money for a down payment. Nevertheless, if you require it after 10 years, then you can easily invest in equity funds and let compounding play its role.
Note: Your salary, monthly investments, intended investment period, and final returns shall align with the price of the car you are willing to purchase.
Kindly don’t invest Rs 5000 per month for 10 years to buy a Defender. (We know you won’t; just saying.)
If you are planning on marrying in 5-6 years, then investing in aggressive hybrid or moderate-risk equity funds is ideal.
What’s the purpose of studying, earning, saving, and investing? To make the best out of your life and live a comfortable old age life, isn’t it? So, if you also want a comfortable retirement plan, then plan it strategically. Start investing early for long-term compounding and use a Step-up SIP to build a large corpus.
For initial stages, invest in equity or hybrid funds, and as you get closer to your retirement, switch to debt or lower-risk funds.
You don’t have to solely depend on your savings and a single investment to attain your short-term and long-term financial goals. There’s one SIP for each financial goal. All you have to do is plan strategically, invest wisely, and adjust your investments according to the market conditions.