Finance, is a terminology describing activities linked with banking, leverage or debt, credit, capital markets, money, and investments. Friends there are two types of finances, first is the debt finance and the other one is the equity finance. Debt finance refers to money borrowed from external lenders for example bank, whereas Equity finance refers to investing your own money, or funds from other stakeholders, in exchange for partial ownership.
Why financial plan?? What is the need of it??….before that lets understand what is financial planning. Financial planning is a step by step journey to meet one’s life goals. A financial plan acts as a guide as you go through life’s journey. Financial plan helps you to manage your income, expenses and investments such that you can manage your money and achieve your goals.
Before commencing any project we need to plan, similarly in life we need financial planning to enjoy our life as well as retirement happily. There is a specific individual one can hire for their investment or financial planning known as certified financial planner(CFP).
Financial planning helps in knowing your short versioned financial goals and long-term financial goals and helps to meet those goals. Having one will help u in maintaining discipline with regard to your money.
For example, if you want to build up a corpus of Rs. 30 lakh for your daughter’s college education through investments, you need to grow this amount by the time she turns 22. Not a year later. This is where financial planning becomes essential.
Financial planning ignites with great advantages for every individual…… :-
1)It increases saving potential of the individual.
2) You can enjoy great standard of living without compromising your current lifestyle.
3)Emergencies come without knocking the door in life ,financial planning make sure u r safe in that regard as financial plan help saving money .
4)The most important thing in this era is peace of mind of any individual, financial plan helps to attain peace of mind too.