Myths Of Financial Planning

“Money cannot bring happiness, but lack of it may surely cause inconvenience”

Financial planning is a process of meeting your life goals through proper management of your finances. Start by working out for your goals in life, in the short, medium and long term. Life goals can be buying home, saving for your child’s education or planning for retirement. It’s about getting organized, being in control of your finances rather than letting your finances control you.

There are few misconceptions about the Financial Planning which are listed below:

  • Only rich people need financial planner :

It is a misconception that only rich people need financial planning, every individual need financial planning to achieve their goals. Financial planners review one’s situation; he can see the opportunities that we can never think upon or the risks that we wouldn’t have considered.

  • I don’t need a financial planner, I can handle my planning on my own :

A layman can’t handle his finance on his own because-

  • Plethora of financial products.
  • Dynamic economic environment.
  • Lack of time.

A trained and experienced professional can help you evaluate your finances objectively, with a range of skills that can include cash and debt management, asset allocation, investments, insurance, retirement planning, estate planning strategies, a financial planner can identify strengths and weakness and recommend appropriate actions.

  • Financial planner help only with investing ;

Investing is the first step towards meeting ones financial goals. But there is much more to be added to a solid financial plan. Budgeting for day to day expenses, maintaining the right insurance coverage and making smart tax decisions are equally important. A financial planner can offer assistance in all these areas.

  • I’m saving enough for retirement;

As life expectancy is increasing future retirees will need larger corpus so they don’t outlive their savings. Investing early is essential to take the benefit of compounding returns. While finding out the corpus inflation should always be on mind. A normal layman doesn’t have all this knowledge there the importance of financial planner comes.

  • Saving for my kids tuition fees comes first ;

In today’s world education is very important and the price to pay for this is increasing day by day. So it is important to save for the child’s education which a layman always uses pay as you go option which is not right. So financial planner helps to plan you for your child education so you don’t need to take loan for it

So, in my opinion Financial Planning is a beneficial tool which all can use to achieve their financial goal and live their lives happily and easily with their money fully maintained.

This blog is written by Manuraj, student of Post Graduate Diploma in Financial Planning(PGDFP), International College of Financial Planning(ICFP)

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