It is impossible to overestimate the importance of personal financial planning in India. It's not only about putting more money aside and cutting costs. Financial planning entails a lot more.
There are several goals to look forward to in financial planning, here are a few reasons why you need financial planning in life :
● Capital requirements will be determined by criteria such as the cost of current and fixed assets, promotional expenses, and long-term planning. Capital requirements must be considered from both short- and long-term perspectives.
● Because the cost of common products is rising, you will need to build a sufficient financial corpus if you wish to maintain or improve your current way of life in the future. In the future, you could wish to buy a better car or a new home.
● The capital structure, or the relative sort and percentage of capital required in the firm or in an individual’s life, is determined by determining the capital structure. This encompasses both short- and long-term debt-to-equity ratio considerations.
● Defining financial policies in terms of cash management, lending, borrowing, and so on.
● Your retirement could be 25 or 30 years away. However, this does not imply that you should plan for it when you retire. You must begin establishing your safety net now if you want to live a happy and comfortable retirement life. Early planning can help you safeguard your financial future in the face of financial uncertainty.
● You get to ensure that the limited financial resources in your hands are used to their full potential at the lowest possible cost in order to maximize returns on investment.
● Not only in India, but around the world, education has become prohibitively expensive. And this expense will continue to climb in the future. This is why it is critical to begin planning as soon as your child is born. Calculate how much money you want to make and begin investing in long-term investment opportunities that will help you reach your objective. If you're unsure how to continue, you can seek guidance from a financial advisor.
● You most likely pay a significant amount of tax each year. However, you can now lawfully reduce your tax bill. The Indian Income Tax Act contains a number of measures that allow persons to lower their tax liability. You can determine the best ways to invest your money and lower your taxable income by preparing your taxes ahead of time. Mutual funds are a tax-advantaged way to invest for your long-term goals.
Isn’t that a win-win for you!