How should I go about My own Financial Planning

We all must know and accept the fact Planning is the first and foremost step for achievement of our goals, be it a student planning, his study time to obtain good marks to our cricket team planning how to chase huge score, and even the corporate world planning to increase sales and its market share. Planning is the life engine of our entire thought process train in every walk of life, from personal to financial life. And to stress the importance of planning, there is an age-old saying which goes like “failing to plan is planning to fail” which in simpler terms mean if you do not plan well, you are surely going to fail.

Finance – Most Important Part of Our Life

Be it the personal goal, or family goal, or whichever goal; their achievement is dependent on our finances to a great extent. If we have enough financial resources, we are going to achieve all our goals. So financial planning is of utmost importance to all of us

Financial Planning Process

Financial Planning Process

1. Realization of the Fact That You Need Financial Planning

First step of financial planning process and analysis is to just realize that YES, I need personal financial planning. Most of us are so busy enjoying our present life that we hardly care to think of the future, let alone plan for the future. We derive great pleasure in “Instant Gratification” We must buy all the latest gadgets, cloths, car etc even if cannot afford them by our means. We take loans, buy on credit cards, do whatever; just to derive pleasure today. We try to avoid thinking about the future; how will we going to fulfill our goals, how should we prepare our investment and finances to meet those goals etc. And so I believe the first and the most important step in Financial planning and analysis is to realize the importance of the very concept – financial planning

2. Clear Financial Goals

Most of us have a lot many different investments going on – most of us have LIC policies, some FDs in the banks, and some shares/stocks in our demat account. And all of these investments are going on “Hawa mein”

Why have I purchased this policy and how long I intend to run it? How much will I get at maturity? If I have put X amount in FD, then what amount can I expect on its maturity and what will be its tax implications? We have never given it a thought and they are just running “hawa mein” We sell off our share/stock holdings the moment there is an upswing in the prices and buy new set of shares/stocks to repeat the same activity. Sorry, this is trading and not investing.

Please define specific and clear financial goals and then take up your investments. If you decide to take up insurance policy for your child education, decide today that what amount would be required after 18 to 20 years and would the proceeds of my insurance policy would be enough to meet that goal? If not, what additional investments do I need to make to meet those goals?? Clarity of financial goals will help to ascertain the kind of investments and also will keep you on track to continue those investments.

3. Take Help – Hire Financial Planner

Everybody has his own area of expertise. A doctor howsoever highly qualified, is not expected to build roads or dams, and in the same way an engineer is not expected to monitor a business house’ account books and tax returns. So instead of relying on half-baked knowledge from newspapers and business channels, take help of your financial advisor or financial planner. Time and money spent with them will not only help you to save precious time but also will help you to better manage your money. Let an expert do the things for you. After all, even Sachin Tendulkar goes to his coach for honing his skills.

4. Action or Execution – Just Do It

Most of us, after learning what we need to do or what we should do, tend to “procrastinate.” I will do it from Monday, from 1st of next month, on my birthday etc. This is the most dangerous stage of financial planning. We do make provisions for our day to day expenses which can be delayed for some time but always tend to avoid or ignore investments etc. This is actually wrong and impacts us hugely in the long term. Instead, what we can do is to start with small steps. You can always start a mutual fund investment with a SIP of as little as Rs 500 per month. Do not underestimate the power of compounding. A regular investment of Rs 500 too can accumulate to big corpus over a long period of time. So just go out and do it.

5. Avoiding Perfection

As the saying goes “time and tide wait for no one” and so, there is no one best plan or fund or scheme is there in the financial market on a permanent basis. A fund which was number 1 last year may not appear in top 10 funds list this year. And there are people who spend days and months in finalizing their plan of investment to select one best policy or fund. There are a plenty of decent options available, both in insurance and investment field, for you to start your financial journey and you can opt for any one of them. HDFC Top 200 Fund has made the money 20 times in the past 16 years since inception.

6. Monitoring Your Portfolio of Investments

Just like you get your car serviced every year or get yourself a dental/health check once a year, do monitor and review your financial plan with your financial advisor/planner at least once a year. This will keep you on tract as to how much insurance you required, or which fund is- not doing well and why, which fund is to be switched or is there any new fund to be added to the portfolio. As the saying goes, “a stitch in time, saves nine.” You can always steer the plan from derailing and keep them on track through this activity.


Follow this financial planning process and analysis, and I am sure you will be on a smooth ride towards achievement of your financial goals. “Happy journey and Happy Planning”.

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