Financial Planning

Hi Readers, very warm welcome to all of you. In this blog session we will discuss about financial planning. Everyone has needs and aspirations. Most needs and aspirations call for a financial commitment. Providing for this commitment becomes a financial goal. Fulfilling the financial goal sets people on the path towards realizing their needs and aspirations. People experience happiness, when their needs and aspirations are realized within an identified time frame.

What is Financial Planning?

Financial planning is a planned and systematic approach to provide for the financial goals that will help people realise their needs and aspirations, and be happy

Objective of the Financial Planning:

The objective of financial planning is to ensure that the right amount of money is available at the right time to meet the various financial goals of the investor. This would help the investor realize his aspirations and experience happiness.

How to asses financial goals?

The financial goals related to making the son a doctor, call for commitments over a period of about 6 years – 2 years of under-graduate studies, coaching class expenses for preparing for the medical entrance exams, followed by the medical education and hostel expenses. An estimate of these future expenses (the financial goals) requires the following inputs:

• How much would be the expense, if it were incurred today?
• How many years down the line, the expense will be incurred?
• During this period, how much is likely to be the rise in expense on account of inflation?
• If any of these expenses are to be incurred in foreign currency, then how would changes in exchange rate affect the financial commitment?

So, what is your financial goals? Comment below.