Financial Planning - Definition, Goals and Benefits

 What is Financial Planning?

A rigorous, step-by-step method known as financial planning must be used in order to achieve one's own financial goals and life objectives. A financial plan could help you on the path to achieving your future financial goals and successes.

It is helpful for keeping track of your income, expenses, and assets in order to manage your money properly and accomplish what you want within the allocated time.

Financial Planning Goals

Create SMART financial goals (specific, measurable, achievable, relevant, and time-bound).

Benefits of Financial Planning as mentioned below:

  • Establishing short, medium, and long-term financial objectives.
  • Choose your discretionary income to save from and increase your life savings.
  • Raise your standard of living without sacrificing your current way of life by practicing sound money management.
  • The use of a reserve fund to manage crises. An emergency fund that is at least equal to six months' worth of monthly income must be kept on hand.
  • With long-term investments, raise the savings rate.
  • Protection from unforeseeable risk.
  • Enable goal-based investment planning for short-term and long-term financial goals.
  • Gain peace of mind.

Conclusion

A financial plan is not a written document; rather, it is a tool for tracking your progress. Remember that you want to put your financial strategy into action as early as possible. Reevaluating your financial strategy periodically is a good idea, particularly if your financial situation or manner of life has changed.

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Location: India

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