Or what does a financial plan do for You?

Many people get put off by words like ‘financial plan’ or ‘financial planning’, so here is a summary of what a financial plan should do for you (read as financial plan, not as financial planner – Mr. Sengupta feels I promote planners too much on my website and he was wondering why, so here is a disclaimer!).

A financial plan should do the following for you:

1. Force you to write down YOUR financial goals: unless a goal is written down along with the steps for achieving them, it is a dream. Dreams do not get fulfilled unless it is worked on with sincerity and honest efforts.

2. Once you write the goals down, put the timelines on them, and put the present and future values – it will force you to see whether it is realistic, whether you can afford many of those things, see how to prioritise them…when you do not write it down, none of these things get done!

3. It will force you to spend within your limits to fund your goals or re-set the goals themselves.

4. It will tell you whether your goals, investments and time lines are in congruence to each other.

5. It will force you to LOOK at the impediments in achieving the goals – critical illness, surgery, stoppage of income for other reasons, etc.

6. It will show you your current mistakes – and that alone may be enough to justify the fees that you may have to pay for the plan!

7. It will show you the milestones on your Journey path and take corrective action if necessary.

8. It might force you to look at new and better instruments in which to invest

9. It will force you to find all the risks in your life and take a suitable cover.

10. You will realise the importance of Retirement Planning!

11. It will make you more confident of your money and be able to explain to your spouse and kids the logic of all your spending and investing: Normally in a family lack of clear financial communication causes stress.

12. It will help you build wealth, meet your goals and reduce financial stress.

Let me repeat, there is no reason why you cannot make your financial plan. HOWEVER, if you are too lazy or reluctant to do it, see the help of a financial planner and take his help.

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