Planning plays an important role in our life, be it a Financial Planning, Career Planning, Business Planning, etc. Financial Planning forms an integral part of all types of planning. Efficient planning makes it easier to achieve our goals. The main objective of Financial Planning is to make available the funds when required.
Here we will discuss Financial Planning for an individual.
In our life, we have different goals to be achieved. We need funds for our livelihood, Marriage, Housing, Health, Higher education of a child, Marriage of Child, and finally, for our retired life. Funds are required for all these activities. Therefore, meticulous financial planning is needed to achieve the same.
Funds requirement can be divided into 3 categories i.e., Short Term, Medium Term, and Long-Term requirement – depending upon the period over which funds are required.
Short term funds are required to meet the current expenses up to one year. Usually, these are needed for necessities and unforeseen expenditures.
Medium-term funds requirement is to meet the expenses required above one year to five years period. It mainly consists of the purchase of capital items of necessities, Education, Medical, etc.
Long term funds are required to meet the expenses to be incurred above Five years. It mainly includes funds needed for the higher education of children, purchase of a house, retirement planning, etc.
The following are the major types of Financial planning, depending on the requirement.
It is an integral part of planning. Funds are to be invested as per the Short-term, Medium, or Long-term requirements.
It is everyone’s dream to own a house in his lifetime. It requires long-term planning. Here funds are deployed for a long period, say for 15 to 20 years in order to accumulate handsome funds to buy
It is to be done for the effective management of Tax liability. The points taken into consideration are how funds are to be invested in meeting the tax liability and how tax liability could be minimized.
It is also an essential aspect of planning. One has to retire after serving for specific numbers of years of service, mostly on completing 60 years of age. It lets you lead the same standard of life, which you were leaving during your working period. It requires long-term planning. Here funds are to be invested for a period of 15-20 years to generate a good amount of corpus.
Tax Planning refers to the analysis of the financial position concerning the payable tax liability. Tax Planning enables the person to reduce tax liability legally. Tax Planning is an important component of Financial Planning. Financial Planning has got a larger perspective. Tax Planning is equally important for both individual and Businessmen. It helps them in rationalizing their tax liabilities.
The following are the steps in Tax Planning:
The total income for the year to be estimated in advance. Based on the total income and taxable income also to be estimated. This will help in proper tax planning for the ensuing financial year.
We must file our Income Tax Return at the end of the year within time to avoid any penalty.
During the year tax liability is to be assessed regularly based on the income. This will help in keeping the tab on tax liability so that there will be no panic at the end of the year.
As per the forecast of the tax liability, if advance tax is to be paid we must pay the same within the stipulated time to avoid interest for the delayed period.
Once expected total income for the year is known. The expenses and the amount available for investment can be estimated. Investment in tax savings schemes may be started at the beginning of the year. We may start investing in Equity Linked Savings Scheme of Mutual Funds through monthly SIP or start contributing to the PPF scheme. This will reduce the pressure at the fag end of the financial year.
The following are the most popular tax savings methods:
Succession Planning refers to preparation for handing over the mantle of an organization in the event of Retirement, Resignation, or any other unforeseen circumstance to a suitable person. Succession takes place in the family as well. Son takes place in the position of father after his demise. The Succession Planning is a need of all organizations irrespective of their size.
Succession Planning is necessarily a process of developing a leader who can take place in the position of existing leaders when they retire or leave. This helps the organization in continuing the business uninterrupted. Succession Planning is an important part of business strategies incorporate Sector. Therefore, it is also called Corporate Succession Planning.
Succession Planning is an important part of the Human Resources Planning. It is not certain as to how many employees will continue in the organization. Suddenly leaving the organization will create a vacuum and affect the functioning adversely. Hence, HR Dept. has to be in preparedness to meet such eventualities. They have to keep on identifying the key positions and employees to fill such positions on an ongoing basis.
This is the first step in succession planning. The key area and position should be chosen carefully, looking at the need of the organization.
The required capabilities are to be identified for the identified position to select a suitable candidate.
Succession planning aims to develop leadership substitutes for the unhindered functioning of the organization.
The following matrix is used for successful planning
The overall turnover rate of the employees is to be assessed and a certain level of no. of employees are to be maintained. This is done to meet shortage due to suddenly leaving the organization by the employees.
Efforts are to be made to retain talented employees, who could be future leaders by offering them Training, Monitory benefits, etc.
Open positions are to be identified and filled up from the identified succession candidate within the organization.
When an open position cannot be filled from within the organization, recruitment from outside has to be done. As it is a time-consuming process, it has to be started well in time so that there is no gap in between.
The following are popular models used in the Succession Planning:
SIP, also known as Regular Savings Plan (RSP) in some countries, allows you to invest a fixed amount at pre defined frequencies in mutual funds. A bank / post office recurring deposit is the only other investment option that is similar to SIP. There are basically two options that an investor could take when they are making investments, one would be to invest lump sum into mutual funds and the other would be to invest using an SIP
Planning for your child's future is a much common concern, which continues to exist in the hearts of every parent. Parents in no way want their children with the same pains, hardships, shortage of money and resources, which were once experienced by them. None of the other joys carry enough potential to please parents than seeing their own children growing not only physically but financially also. As a parent if you have started experiencing the hindrances in relation to the development, education and marriage of your children then you are surely in need of children's future planning.
The primary purpose of children's future planning is to develop accurate financial needs by drawing a guide map of all foreseeable expenditures including higher education and several others, which might arise in the coming years.
Furthermore, in today's hectic world, where inflation is already hitting hard and saving as well as investing for your child's future is getting difficult, none but alone children's future planning serves as a perfect destination, if you are eagerly looking forward to making strong and feasible financial career. If the cost of your child's college fees is raising your fears, then this planning is crucial for you.
Children's future planning services offerings with us overcome almost all of your worries as we take whole responsibilities on our shoulders. We keep you enlightened with those investment techniques, which can cover your financial blanket at the deepest level.
Along with this, we teach your children the value of money. Being included under our children's future planning services, you can receive excessive freedom towards the overall management of money as it is never too late to start planning for your children's future. Under successful planning scheme, we work towards the betterment of feasible and stable financial career of your children.
Covering yourself under the umbrella of insurance is extremely important especially for breadwinners who are supporting their families alone. Insurance planning is primarily concerned with ensuring in covering against all the risks, which remain prevalent in our routine lives. The planning of insurance is an important attribute of life, which cannot be ignored at any cost.
Whether it is concerned with buying a dream house, accumulation of wealth, pay check or even covering basic human needs, the role of a successful insurance planning cannot be ignored. You must not believe that proper insurance planning can allow you to receive the same benefits by charging you lesser premium than before.
Bear in mind, insurance is an important risk management tool that can protect you and your family from financial hardship caused by unplanned events. In order to make this whole process more affluent,we work with our clients to identify your risks and implement cost-effective risk management program that has been developed with your specific circumstances and requirements in mind. Insurance recommendations provided by our Insurance Planning Services include:
Under the guidance of our sharp minded employees, you can get an opportunity to receive wider insurance coverage and interestingly at low premium rates. Consideration of your overall needs, deciding what type of life insurance can best meet with your needs and other service related queries are actively answered by our efficient financial advisory team.
A well planned insurance policy of ours can help you out in obtaining excellent financial security of both life and asset in mind. Along with this, if you are suffering by paying more than half of your profits on taxation then do not worry at all as some of our insurance planning services facilities allow you to eliminate tax related expenses greatly. Contact us immediately!
All of us work very hard in our life to be successful. But very few of us taste the fruit of success. If we carefully analyze the working of the successful people, we will find that they work differently. They work systematically and with focused attention to achieve the life goal. To achieve this, they plan meticulously. It's called Goal Planning. Proper Goal Planning helps us in working smarter; of course, we have to work hard also. Smart working helps in optimizing the desired results.
Sometimes people confuse vision with Goal Planning. They think that both are the same, but not so. Having the vision is the first step of Goal Planning. Vision gives you a destination, whereas goal Planning helps in reaching the Destination.
The first step of a Goal Planning is setting up of a Goal. The word SMART helps in setting up of any goal. It is an acronym of Specific, Measurable, Attainable, Relevant, and Time-bound.
The success of the Goal Planning lies in the proper execution of Goal Plan. The following are the steps of the execution of Goal Plan:
The following are the key areas where proper goal planning can help in achieving the desired aim. We can classify goals into Long Term and short term goals.LONG TERM GOAL:
Long Term goal requires punctilious planning and takes 10 to 15 years.
Short Term Goals are for a shorter period. It may range from six months to 3 years.
Goal Planning is equally significant in Financial Planning. Finance plays a vital role in our life. We need money at every stage of our life, be it Education, Treatment, Marriage, Higher education, Purchasing house, Retirement, etc. Meticulous planning may ease our burden.TYPES OF FINANCIAL PLANNING
The following are the significant areas of financial planning:
Besides above we need funds for Marriage, Higher education of children, medical treatment, the Purchase of houses, etc. for all the above expenditures we must have funds in our hands. You can achieve this through proper financial planning only.
The following are the key benefits of the proper financial planning:
1. It helps in managing your funds in a better way and offers better returns.
2. It helps in determining your need for funds for various purposes like Marriages, Higher education, Medical treatment, Retirement, etc. It helps in fixing the goal accordingly.
3. It helps in preparing a suitable investment strategies for optimum return on your funds.
4. It helps in the creation of wealth over some time due to the compounding effect on returns.
5. It helps in monitoring of investment and change the same as per the requirement.
6. It inculcate the habit of thrift and savings, which helps in providing funds for investment.
7. Tax planning helps in savings on tax legally.
Like another thing the financial planning has some disadvantages also. The following are the main disadvantages:
It is clear from our discussion that Goal Planning plays a vital role in our lives and helps us in achieving various landmarks in our life.