I AM ASKING A BASIC QUESTION….AND the question is do you need p f p? I AM NOT asking whether you need a planner. That is a different question.

So, do you need the personal financial planning process? Read on

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 can cost more than originally planned.

Your company pension plan may not be enough to maintain your standard of living after retirement.

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.

EVEN BETTER, READ AND LEARN TO DO IT YOURSELF – it is the best thing to do.

What should it include?

A comprehensive 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.

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?

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.

What type of advice can I expect from a financial planner?

You can expect objective financial advice that is tailored to meet your financial goals and objectives, as well as the level of risk with which you are comfortable. Depending on your unique situation and goals, your financial planner may confer with your lawyer, stockbroker, insurance agent and other investment advisers to achieve the best plan for you.

After a plan is developed, what happens next?

The best plan is useless unless put into action. A financial planner can advise you how to implement the plan and can put you in touch with other financial experts as needed.

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. THANK YOU SUBRA….EXCELLENT INPUT.THE SOONER ONE START ,BETTER FOR US…EXCELL / DIARY…Thank You for motivating to write down expenses…New month just started..Lets Attempt !


    Thank you very much sir for another eye-opening message across. Your post is really motivated me to hire PFP right away as such iam sitting on the fence person. You really pushed me now. 🙂 Once again thanks a lot.

  3. natarajan srinivasan,

    i did not say hire a PFP. In fact hiring a pfp is not easy, and good ones are NOT easy to find. First find out what u need to know to hire a pfp. By the time u know what all u shd know to hire a pfp you will conclude that it is better done by oneself. A bad fp can damage viciously as I recently found out from a friend’s uncle’s account


    sirji, thanks for your comments. ofcourse you did not say hire FP or PFP. Pardon my ignorance. At least i can say that your todays blog made me to think to contact PFP to identify / determine my current position Where am I? and what should i do for my children. At the outset, your todays blog made me to do it today / now and not to do delay in financial planning. 🙂

  5. 99% of the population needs a FP just because they just don’t understand “inflation” and its implications.

  6. Subra i am a great fan of your blog for the last one year i am actively reading your articles nice and fruitful.When it comes to FP for me i need to have my asset allocation and then dividing it further to asset class such as Eqity,Gold,Insurance,Mutual Fund,Real Estate,Art and then allocating funds as per the need and long term goal.I don’t know whether FP is of any help to me ????

  7. Hi Readers,
    Shall we make use of this space for discussion on Subra’s post to enhance our understanding? I know that there are so many silent readers of this blog who has much more knowledge than us. Maybe, they could join as well.

    Also, I believe that would be the real tribute to Subra than comments which do nothing but just thank him.


    Hi Raj,

    We usually discuss Subra’s blog in the FB and the group called “Asan Ideas for Wealth” and there is bunch of professionals there to throw a light to us. Get connected in AIFW if you are in FB. It is a closed group.

  9. Dear Raj, actually the group’s name is –

    asan ideas for wealth

    Dear Natarajan, put the short name hence I’m giving the full name.



  10. financial skills are like technical skills. need to invest time to update our skills routinely else we become obsolete.

  11. my earlier comment with link went to moderation 🙁

    go to google & search “AICPA – Do I Need Personal Financial Planning?” – including quotes – and see the 1st link you get.

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