Importance of Financial Planning - A Key to Wealth Creation
Financial goals are crucial in our lives be it child’s education / marriage, owning a house or family car, planning for post-retirement income. With proper financial planning you can devise an accurate plan to achieve these objectives in a timely manner.
- Define goals and categorize them as short-term (like pay off debt, house repairs, buying a car), medium-term (down payment on a home, starting your own venture), long-term goals (child’s college education or marriage, post-retirement income plan ).
- For each goal, specify a value and a target date. The more specific your goals, the easier it is to measure your progress.
- After finalizing the goals with a definite number, chart out a financial plan with suitable investments like equity funds / hybrid funds / debt funds.
- Regular review of financial plan is crucial so that you are on course to achieve your goals.
Rahul is planning to save for his child’s education. Here is how a financial plan based on mutual Fund SIPs in equity funds can help him achieve his goals.
|Amount||5 Years||10 Years||15 years||20 years|