On January 26th, 1950, when Dr. Rajendra Prasad took the solemn oath as the first President of independent India, it marked the occasion when the people of India truly experienced their freedom from British Rule. Today, India ranks as the largest sovereign nation in the world in terms of population. However, despite being the largest sovereign nation and one of the world's fastest-growing economies, awareness of financial planning in India is extremely low. A lot of people are either unaware of what financial planning is or fail to understand it completely. Owing to these reasons, people often disregard its importance and simply don't value it. 

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As this day marks an important milestone of freedom and independence for our country, why not celebrate this occasion by reflecting on the importance of financial planning.  It becomes paramount to take stock of our financial. In order to take care of yourself and your family, it’s vital that you figure out the financial goals you’re working towards and set a Rupee amount along with a time frame to achieve the said goals. You need to take advantage of your early working years by starting financial planning early which, in turn, will allow you to benefit from the power of compounding thus helping you in build a healthy retirement corpus which will ensure you peaceful golden years. Here are some financial planning measures you should get started on if you haven’t already:

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1.Retirement Planning

More often than not, people tend to put off planning for retirement until they are very close to it which can leave them severely under-prepared. The truth of the matter is that the sooner you begin setting aside money for your retirement investments, the better off you'll be. Not having a judicious retirement plan in place entails that there’s an inherent risk of you outliving your savings while not being able to maintain the desired lifestyle in your retirement years. Starting early can help you build a larger fund so that you can make the best use of your hard-earned money post-retirement. Remember, the longer you delay, the more sacrifices you'll have to make to catch up. Start early and plan well to remain financially independent even in your work-free years.

2.Child’s Future Planning

As parents, you always want the best for your children so that they go on to become a successful and responsible individual. Every single parent sacrifices his or her own desires in order to ensure their child’s future is secure. As a parent, you would like to plan for your child’s future in a way that all his future requirements are properly taken care without having to worry about money constraints. By planning ahead, you can ensure that your children get the best possible education so that there is no running around at the time when the actual requirement arises.

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3.Insurance Planning

Insurance planning is undoubtedly, a critical component of a comprehensive financial plan. Having a life insurance plan in place ensures that you and your dependents stay financially protected while also helping protect your loved ones from the impact of financial loss that your family might have to bear in case you’re no longer around to support them. Moreover, it ensures that your family does not need to compromise much in their manner of living by helping cover day-to-day costs.

The Bottom Line

Life has a way of throwing us an occasional wrench so not having a prudent financial plan is actually just having a really bad plan. Investing may seem daunting at the start, but by taking sound steps to build a financial buffer that is quickly and easily accessible, you can shape your life for the future.

AN Jan 03/18

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