Planning for a secure financial future is a must! It can be done, and is not easy, but is not rocket science either.

Maybe you’re saving to buy your first home?
Perhaps starting your own business is a dream.
The costs of a college education have spiraled and you may wonder how you will pay for your child’s education.
You will probably live longer. Additional years after retirement WILL cost more than originally planned.
Your company pension plan may not be enough to maintain your standard of living after retirement. Worse, it may cancel the pension plan by the time you retire!
Complex financial marketplace and changing tax laws make it difficult to understand your financial picture.

Everyone needs to plan for tomorrow. At every income level, there are steps you can take to make more efficient use of your assets and to ensure a secure financial future. It makes sense to develop well-defined goals and to map out appropriate strategies to turn your dreams into reality. To help you get started, below are some frequently asked questions about personal financial planning.

What is personal financial planning?

Personal financial planning is a process, not a product. It is an organized, well-planned system of developing strategies for using your financial resources to achieve both short- and long-term goals. You may think of the process as helping you to answer three straightforward questions:

Where am I?
Where do I want to go?
How do I get there?

When should I start planning?

It is important to start planning as soon as you can. Time passes quickly – it is never too soon to start planning for tomorrow. Nor is it too late to start a plan.

Who should prepare my personal financial plan?

A well-qualified financial adviser should work with you to prepare your plan. A CA financial planner combines the objectivity and trust long associated with the CA profession and the years of experience and expertise in personal financial planning. However, if he does not do this for a profession (most of them do not), look for a financial planner who is a full time professional.

What should it include?

A comprehensive and complete financial plan – one that addresses your entire financial picture – should include a review of your net worth, goals and objectives, property and other assets, liabilities, cash flow, investments, retirement planning, estate planning, tax planning and insurance needs, as well as a plan for implementing your goals.

I don’t have a lot of money. Do I need a full-scale financial plan?

You may not. You can seek out different levels of financial planning advice, from counseling on a particular issue to comprehensive planning. Speak to the advisers you are considering and discuss with them your requirements. You should be able to find one who meets your needs.

What role does goal-setting play in financial planning?

It is important to list both short- and long-term financial goals on paper. You can then rank the importance of the goals. If you are saving toward something tangible, instead of just saving, it may be easier. These goals could include: available cash for emergencies, education for children, care for family members, retirement, a nest egg to permit a career change, acquiring or selling a business, estate planning, financial independence or personal objectives such as a special vacation or second home.

How do I know how much I am worth?

One of the first things that you should do in reviewing your financial situation is to determine your net worth. Many people are surprised to find out how much they are really worth. First, estimate the value of your assets. If you have owned your home for a number of years, you may be sitting on a nice nest egg. Several different real estate appraisals will help you determine its worth. Organize bank, mutual funds, insurance policies and brokerage statements and record their value. List your liabilities such as housing loan, car loans or credit card debt. Subtract your liabilities from your assets and you will have a good estimate of net worth.

How can I plan for tomorrow when I can barely pay for today?

Create a budget. Determine what you actually spend each month. It is easy to keep track of large expenses such as mortgage and car payments. The variable items such as food, clothing and entertainment are often what get away from us. Write your expenses in a diary or an excel sheet – it is far more efficient than the human memory. The human memory is selective in remembering. Excel and diary are not

How much should I be saving?

It is hard to apply a rule of thumb toward savings, because it varies with age and income level. Ten percent of CTC is a good start. If that amount is too high for you, do not let that deter you. You can start by putting a little money aside each month and slowly increasing it.  You should save as well as invest.

How does insurance fit in to the process?

Evaluating your insurance needs is part of personal financial planning. The insurance industry has changed a great deal over the past few years and there is a wide array of new products. Some of them may be better options than your current coverage.

Do I need a will? – not sure, if you are SURE that you are NOT going to die, you do not 🙂

Everyone needs a will. Whether you are single or married, you need a will. No one but you knows how you want your estate divided after your death. It is especially important if you have children. If you do not have a will and both you and your spouse die, the court will appoint a guardian for your children. Maybe you would have chosen someone else.

How often should I update the plan?

It is good to review the plan when there is a significant life event such as marriage, birth, death or divorce. Any change in financial position should be evaluated as well. Many people have an annual update that reviews how the plan is being implemented. The review also considers changing goals and circumstances.



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  1. Although the comment/ reply doesn’t apply to this specific post but it does relate to overall theme of this blog.

    Except me; everybody on this earth is earning money on pre construction premium and it looks such an easy money. Give 20% to builder till then price of the property gets appreciated by 50% and you are earning 2.5 times on your initial money.

    Any caveat or otherwise I am going to leave my job and going to be multimillionaire by this method?

  2. Real estate investment is very tricky, especially of pre or under construction properties. In addition to your acumen on whether the property will appreciate properly, you have to deal with a lot of other unanticipated issues/problems.
    > First problem, under construction properties may not get completed in the required time-frame
    > Second, even bigger problem, the property may not get constructed at all, since builders don’t obtain all permissions upfront, but start taking permissions later when they get enough bookings and can grease the palms of authorities
    > Next, even after getting possession, builder may not get occupation certificate for a long time from the municipality
    > Next, Builder may ask for black money, which you cannot take a loan
    > If you took a loan, but builder did not give you possession…only God can help you
    > If you paid from your savings, but builder did not give you possession, you only lose what you paid

    > The other overheads such as stamp duty, maintenance deposit etc etc are all to be borne by you..but other than stamp duty, you cannot add others to cost of capital (when you sell the flat/property)
    > Regular maintenance outgo
    > Flat water leakages, no proper water supply, roads, transportation (all new/under construction flats suffer from this)
    Still more…
    > Risk of property market crashing
    > Insufficient jobs in the area, or remote area (you bought it coz it was cheap right!) leading to no price appreciation
    > Headache of finding a proper buyer to sell the flat to…or if you’re renting, then a proper renter

  3. Excellent post. Consistency with discipline will keep you on track and build wealth over period of time.

    Just in case if anyone interested to track personal/household expenses/income in Excel Spreadsheet, I am using it since 3 years and it absolutely helped me to keep an eye on my expenses/income and track all monetary transactions.

    Please download it from here: (unzip and use it).


  4. Hello Subra

    Very well written article. I run a website called for financial planners in India with 2000+ subscribers. I can post this article their with due credits to you and a link back?

    Kindly check out the website.

    Thanks… Sadique Neelgund

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