It is the process which makes you fully aware of your personal financial position and helps you make changes in line with your life’s personal financial goals and your risk profile.
The importance of personal financial planning is high because it helps you take control of your money.The money we earn endows us with a certain lifestyle but how we manage it allows us to sustain it. Therefore personal financial planning is essential for growing wealth and ensuring financial security.
Personal Financial Planning is personal because it entirely depends on the age, health, family status of the person. The financial situation, goals, protection requirements are analysed to chart out a detailed personal financial plan.
A person who is young can take advantage of compounding to build better corpus and to meet life financial goals with ease.
A middle-aged person may be tied up with huge monthly EMIs and may worry about putting children through school and college while making ends meet.
Someone nearing retirement may be worried about limited nest egg or increasing cost of living over an increased life expectancy with no pensions to rely upon.
A wealth aspirant would be interested in knowing how to get there faster while meeting various personal financial goals.
A wealthy person may be interested in knowing how to protect the wealth, keeping the investments tax efficient choosing appropriate investment vehicles for optimal growth.
You have to be confident and educated about your money management to create a financial plan that suits you. Do it yourself or hire a financial advisor who helps you set up things in the right way. This helps avoid the traps that the financial industry. Consult a SEBI Registered Investment Advisor because this assures you of zero commission, compared to a certified financial planner.