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Personal Financial Planning

Notes you need expertise you don’t possess in certain areas of your finances. For example, a
planner can help you evaluate the level of risk in your investment portfolio or adjust your
retirement plan due to changing family circumstances.
you want to get a professional opinion about the financial plan you developed for yourself.
you don’t feel you have the time to spare to do your own financial planning.

you have an immediate need or unexpected life event such as a birth, inheritance or major
illness.
you feel that a professional adviser could help you improve on how you are currently
managing your finances.
you know that you need to improve your current financial situation but don’t know
where to start.

Here’s a list of the benefits that a well chalked out financial plan can bring about:
Helps monitor cash flows and reduces unnecessary expenditure.
Enables maintenance of an optimum balance between income and expenses.

Helps boost savings and create wealth.
Helps reduce tax liability.
Maximizes returns from investments.
Creates wealth and ensures better wealth management to achieve life goals.

Financially secures retirement life.
Reviews insurance needs and therefore also ensures that dependents are financially secure
in the unfortunate event of death or disability.

Lastly, it also ensures that a will is made.
1.3 Importance of Personal Financial Planning

Can you manage without financial planning? Many people do, but they may find—often when
it’s too late—that they don’t have the means to achieve their life goals.
For example, people today realize the importance of living life to the fullest. Consequently,
many opt for early retirement from full time jobs, as compared to a few decades ago, when most
people worked until the maximum retirement age of 58-60 years.
The average person can, today, expect to live a healthy life well into his or her seventies or
eighties, which means that retirement life is almost as long as working life. Financially, it
implies that savings (after taking into account inflation) should be enough, not just to maintain
the same lifestyle for almost 25-30 years, with no new income, but also to take care of medical
expenses, which are usually high the older a person gets. Planning for all this is a tall order for
anyone. That’s why it’s critical for everyone to plan their finances from an early age.

Over the last few years, terms like financial planning and personal finance have emerged as
buzzwords of sorts. Newspapers, magazines, television channels and just about every one under
the sun seem to be talking about the importance of financial planning. So what is financial
planning; more importantly, does it merit the attention that it is being given?
Financial planning is a process through which an individual can chart a roadmap to meet
expected and unforeseen needs in life. Simply put, the intention is to take necessary steps to

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