Due to the uncertain market environment and the unpredictability of the financial future, it’s crucial to choose a strategy that will help you manage your money effectively.
So, in this article, we will discuss why goal based financial planning is so important in India.
What is Goal Based Financial Planning?
A goal based financial planning guides how to manage your expenditure, savings, and investments. It helps you identify your short- and long-term financial goals so you can create a plan to achieve them.
A balanced financial plan provides a step-by-step approach to meeting your life’s key financial goals, such as children’s higher education, buying a home, children’s marriage, retirement corpus, etc.
Importance of Financial Planning in India
The following points focus on how goal based financial planning can help you build a financially secure life.
1. Fulfils Money Needs
With goal based financial planning, you can manage your income and expenditures in a way that helps meet your financial needs on time.
2. Increases Savings
You can save money even without a financial plan. But with goal based financial planning, you get good insights into your expenses and savings so that you can cut down your costs consciously and increase your savings to meet future financial needs.
3. Helps Build your Wealth
If you want to maintain your current living standard in the future, you need to build a sufficient corpus. In addition, you may want to buy a new house, car, go on a foreign vacation with family, etc. To achieve all these desires, you need to have a big corpus. You can achieve these goals by investing your money in avenues that offer high returns. Investing in the right places and getting desired returns is only possible through goal based financial planning.
However, if you aren’t sure where to invest your money to fulfil all these goals, Multipl brings you the best solution. With Multipl, you can create goal-based investments, which means you’ll save and invest at the same time for a specific purpose.
The Multipl investment engine allocates the right assets and investment portfolio based on your duration, purpose, and risk profile so you can achieve your goal with maximum safety and liquidity. You can create both short-term and long-term savings goals like Vacation Goal, Gadget Goal, Retirement Savings Goal, Child’s Education Goal, and many more. On goal completion, you get exclusive brand benefits in the form of brand discounts. To learn more, download the app from Play Store/App Store.
4. Helps in Better Tax Planning
Every year, you pay a significant amount towards tax. With goal based financial planning, you can invest in avenues that provide tax deductions and offer high returns. Thus, it will help you reduce your taxable income and fulfil your life’s goals.
5. Gives You and Your Family Financial Security
A well-balanced financial plan must include investments that ensure financial security for you and your family. For instance, you can buy term life insurance that provides financial security for your family. Also, you can invest in other insurance categories like health insurance, home insurance, etc.
6. Helps Prepare for Financial Emergencies
The future is completely uncertain, and you must be ready to face uncertainties like COVID-19. Goal based financial planning helps you create an emergency/ contingency fund so you’re prepared for any financial emergency.
Goal based financial planning is the best way to invest wisely, increase savings, and meet your family’s financial obligations. Properly managing your finances can help you achieve financial peace of mind.
If you have any thoughts or questions about your financial plan, please leave them in the comments section below.