• Invest
    Investment Suite
    Stocks
    Mutual Funds
    Future and Options
    IPO
    Exchange Traded Funds
    Commodity
    Stockcase (Stock Baskets)
    Currency
    Non Convertible Debentures
    Sovereign Gold Bond
    Exclusive
    NRI Account
    Private Client Group
    Features
    SipIt
    MTF
    Investment Suite
    Exclusive
    Features
  • Platform
    Product Suite
    Kotak Neo App & Web
    Nest Trading Terminal
    NEO Trade APIs
    Features and Tools
    MTF
    Securities Accepted as Collateral
    Margin Requirements
    Payoff Analyzer
    Calculators
    SIP Calculator
    Lumpsum Calculator
    Brokerage Calculator
    Margin Calculator
    MTF Calculator
    All Calculators
    Product Suite
    Features and Tools
    Calculators
  • Pricing
  • Research
    Research Calls
    Long Term calls
    Short Term calls
    Intraday calls
    Derivatives calls
    Pick of the week
    Top Monthly Picks
    Research Reports
    Fundamental Research Report
    Technical Research Report
    Derivative Research Report
    Research Calls
    Research Reports
  • Market
    Stocks
    Market Movers
    Large Cap
    Mid Cap
    Small Cap
    Indices
    Nifty 50
    Bank Nifty
    FinNifty
    Nifty Midcap India
    VIX
    All Indian Indices
    Mutual Funds
    SBI Mutual Funds
    HDFC Mutual Funds
    Axis Mutual Funds
    ICICI Prudential Mutual Funds
    Nippon India Mutual Funds
    All AMC's
    IPO
    Upcoming IPO
    Current IPO
    Closed IPO
    Recently Listed IPO
    Stocks
    Indices
    Mutual Funds
    IPO
  • Learn
    Resource
    Market Ready
    Kotak Insights
    Infographic
    Podcast
    Webinars
    Youtube Channel
    Quarterly Results
    Investing Guide
    Demat Account
    Trading Account
    Share Market
    Intraday Trading
    IPO
    Mutual Funds
    Commodities
    Currency
    Futures & Options
    Derivatives
    Margin Trading
    Events
    Budget 2024
    Muhurat Trading
    Share Market Holiday
    Market Outlook 2024
    Resource
    Investing Guide
    Events
  • Partner
    Business Associates
    Fund Expert
    Kotak Connect Plus
    Startup connect
  • Support
    FAQs
    Circulars
    Bulletins
    Contact Us
    Forms Download
    Get your Statement
​

Benefits Of Financial Planning

  •  2m
  • 0•
  • 21 Feb 2023
What Are The Advantages Of Financial Planning?

There are many advantages of financial planning which can have far reaching positive effects on one's life.

Benefits Of Financial Planning

Here are some reasons why a comprehensive financial plan is important:

  • Safety Net For The Future

Financial planning helps give direction to your financial decisions. It helps you decide various investments that can bail you out of your financial problems. For example, investing in various funds may help you repay the loan or save enough for your retirement. Once your financial goals are set, it helps make your life more secure and flexible for any financial emergency situation that may arise. Financial planning thus acts as a safety net for the future.

  • Helps Decision- Making

Financial planning takes stock of your present as well as your future. It thus facilitates decision-making. Take the above example, if you had a proper financial plan in place, you would never be short of funds for your daughter’s marriage or for buying your car. Thus, you would not make any wrong decisions that would affect your financial well-being. This is Why financial planning is the key to success, as it provides a direction for your decisions.

  • Always Be Prepared

Suppose you save 5% of your salary or Rs 10,000 every month. Suppose your after-tax savings consist of Rs 1 lakh. You are saving this to buy your own car three years later. What if a sudden medical emergency crops you, and wipes out your savings? Not only does it affect your wealth, but it could also fall short in an extreme case. Marriage plans for your only daughter? Let's borrow some money from the retirement fund. There goes the trip to Egypt you have been planning all those years! Financial planning will come to your rescue here. It takes into account all your needs and goals, and helps you be ready for any eventuality.

  • Optimum Use Of Resources

A financial plan also helps you form a strategy. This helps you allocate your resources to different assets. Thus, you use your money more wisely, leading to optimization of resources.

  • Better Standard Of Living

With a realistic financial plan in place, you will never be short of funds. Liquidity will rarely be tight. All those month-end woes? Forget about them. Thus, you can achieve your goals without compromising your standard of living.

  • Disciplined Life

It is very common to spend more than what you earn. Many facilities like credit cards, ‘buy now, pay later’ schemes, installment services and so on, compel you to overlook finances or spend more than necessary. At the end of the month, when the bills keep pouring in your mail boxes, you find yourselves in a sticky situation. The mounting bills only take you further away from your long-term dream of owning your own house. If you start planning early, you can get out of a whole lot of financial mess arising later in life. Financial planning thus helps infuse discipline in your life.

  • Expert Advice

Financial planning is often undertaken with the help of an expert. It is wise to seek expert advice from professionals. If not, you could end up with poor financial information and decisions that can prove disastrous. In the case of the working individual, insufficient or random saving for retirement can lead to a poorer lifestyle later. Similarly, in the case of the businessman, poorly managed tax preparation could culminate in unexpected debt and a loss of carefully accumulated wealth.

Did you enjoy this article?

0 people liked this article.

What could we have done to make this article better?

Read Full Article >
Enjoy Free Demat Account Opening
+91 -

personImage
Enjoy Free Demat Account Opening
+91 -