What is financial planning? Why it is important?

Financial planning is the process of planning the short as well as long term financial goals and to create a symmetrical plan to achieve those goals. The financial planning mostly focuses on the current amount and also on the future scopes of that money.

“Unplanned trips are best” you all must have heard of this but aren’t they messy?, Planning is the pre-processing thoughts that help to save time, efficiency and also helps to enhance the future scope. Similarly, if we talk about financial planning, we learn how to save, invest and how to multiply that money.

We often tell our children to save money so, the journey from piggy banks can surely help them in the future. The second major question that arises is why is it important?

So here we have some of the reasons why financial planning is important.

1- Family security:- It helps in making your family secure and hence keeping you and your family’s future on the safe side.

2- Standard of living:- The financial planning not only gives you a properly planned blueprint of financial status but also helps to control the flow of money through insurance coverage and policies. it helps to provide you the “Peace of mind” which directly affects your standard of living. Providing bread even if you have lost some of the income is achievable when you go through any hard times.

3- Financial understanding:- Financial lifestyle can be improved if you have better financial planning. It will automatically enhance the value of money later on by planning it right now.  

4- Savings:- Sudden changes in finances can make you run out of track. It is better to have some investments with high fluidity. Save it in a planned way to make a better scope for the future.

5- Achieving long term goals:- The current saving and further investments can help you out to fulfill your bucket list. It will help you in achieving your long term goals without giving you any second thoughts regarding your budget.