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Learning Personal Finance is important, but learning about personal finance planning is much more important. Expenditure and spending vary from person to person as well as everyone’s income level and short-term and long-term goals differ. So it should be planned in accordance with that.
Financial planning is a step-by-step approach to meet one’s life goals. A financial plan acts as a guide as you go through life’s journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals.
For example: if you want to build up a building of Rs.25 lakh for your family through investments, you need to grow this amount by the time you turn 48. This is where financial planning becomes essential. How to make your investments count.
BENEFITS:-
⁻ Increase your savings
It may be possible to save money without having a financial plan. But it may not be the most efficient way to go about it. When you create a financial plan, you get a good deal of insight into your income and expenses. You can track and cut down your costs consciously. This automatically increases your savings in the long run.
⁻ Enjoy a better standard of living
Most people assume that they would have to sacrifice their standard of living if their monthly bills and EMI repayments are to be addressed. On the contrary, with a good financial plan, you would not need to compromise your lifestyle. It is possible to achieve your goals while living in relative comfort.
⁻ Be prepared for emergencies
Creating an emergency fund is a critical aspect of financial planning. Here, you need to ensure that you have a fund that is equal to at least 6 months of your monthly salary. This way, you don’t have to worry about procuring funds in case of a family emergency or a job loss. The emergency fund can help you pay for varied expenses on time.
Hope these points convince you to keep track of your Income, Savings and Investments make every penny count.