Financial planning is a step-by-step approach to meeting one's life goals. A financial plan acts as a guide as you go through life's journey. Essentially, it helps you be in control of your income, expenses, and investments such that you can manage your money and achieve your goals.
Many may wonder - "Do I really need a financial plan?" Some feel that saving regularly in bank recurring deposits or Systematic Investment Plans (SIPs) of mutual funds does the job of allocating their savings to investments. However, ad hoc investments lead to inefficient utilization of your financial resources.
In order to become rich, besides salary or business income, you need to make money work for you. This is where prudent financial planning and investing come to your rescue. A financial plan enables you to construct a road map to achieve all the financial goals and helps to build your contingency fund for any unforeseen needs that may arise.
A financial plan ensures that you are well equipped to deal with dynamically changing circumstances at a personal level as well as a macro level. In the absence of a financial plan, you might not be empowered to accomplish what you have dreamt of achieving and might also be under-prepared to deal with contingencies.
