Financial planning is extremely important if you wish to achieve your and your family’s financial goals and become better prepared to deal with unforeseen contingencies. A lot of people have started realising this and are undertaking the financial planning process. However, simply realising this will not lead to the fulfillment of your objectives. Sometimes, despite of consulting a financial planner, your financial plan might fail to achieve your goals and streamline your finances.

PersonalFN has listed down 5 reasons why your financial plan might fail and what you should do to avoid it.
 

1. Making an incomplete or flawed financial plan
   
   While making the financial plan yourself or with the help of a financial planner, it is imperative to give complete and correct information about everything that might have an impact on your finances. If you don’t consider all aspects while preparing your financial plan, then this might affect your financial goals. Also, not giving correct information to your planner might result in a flawed financial plan, which might not be useful for attaining your objectives.
   
   For instance, if you under project your current expenses, then this might result in over projecting your monthly surplus and that too not only in the ongoing financial year but also in coming years as well. In reality your expenses may be higher while your monthly surplus might be lower. And, to meet these unplanned expenses, you might be driven to liquidate some assets which otherwise would have been reserved for achieving other goals.
    
2. Not taking the necessary actions
   
   Some people despite of making a financial plan do not take necessary actions while executing the plan. Due to the lack of time or procrastination, they don’t follow their planner’s advice completely. For instance, your planner might have asked you to invest in certain financial products and redeem some non-performing investments. If you fail to do this due to any reason, then it might become difficult to achieve your financial goals as per the plan.
   
   While assessing your insurance needs, sometimes, planners might ask you to surrender an existing policy and instead buy some other policy which they might feel would suit your requirements better. However, due to similar reasons or to avoid offending some friend or relative from whom the policy has been taken, some people decide against surrendering that policy. It is imperative for you to understand; simply planning will not help you fulfill your wishes in life, irrespective of the quality of the financial plan. You need to execute and take appropriate actions at the right time for the betterment of your and your family’s future.
    
3. Searching for ideal products
   
   You would want to invest in those financial products which are perfect in every way. The product should provide you the best returns at the lowest level of risk and should also suit your risk appetite. However, it is important for you to understand that, while it is good to search for these qualities when looking out for optimal investment product, it is also necessary to not loose on time and opportunities.
   
   Some people are also extremely rigid about investing in only certain kind of asset classes and products. For instance, some might be extremely risk-averse and want to invest only in products that are not equity related, while some might only want to include equities in their portfolio. PersonalFN is of the view that it is imperative to choose your allocation to different asset classes and products based on your risk taking ability and time horizon.
    
4. Not adapting your lifestyle as per the financial plan
   
   Your financial plan might require you to reduce your expenses so that you can save and invest more for your financial goals. In order to do this, it is necessary to bring about relevant changes in your and your family’s lifestyle. For instance, you must prepare a budget for your family’s expenses and review it from time to time to ensure that you are sticking to it. Also, you might be required to become a very rational and careful spender to avoid making unnecessary purchases.
    
5. Not monitoring your financial plan
   
   Some people think that financial planning is just a one-time process. They believe that once a plan is constructed all they have to do is follow it and their objectives will be achieved. However, you must understand that financial planning is a continuous process. You need to review your plans from time to time to ensure that they are in line to achieve your goals. Moreover, our lives are dynamic. Any changes which might have an impact on finances need to be incorporated in your financial plan as and when they occur.
    

PersonalFN is of the view that the success of a financial plan not only depends upon how the plan is constructed but also upon how it is executed. Remember that, for fulfilling your financial goals and to live a stress-free financial life, it is necessary to be determined towards the financial planning process.

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