I Don’t Need Financial Planning. Is This What You Think? Read This!
Apr 15, 2019

Author: Deepika Khude

(Image Source: rawpixel.com via freepik)

The strange thing about human behaviour is though we know what's good for us, we often go against our better judgement and common sense. We allow our negative behaviour patterns, habits, self-limiting beliefs, and misconstrued perceptions to control our lives.

For instance, buying things you don't need. If you're a spendthrift, you know impulsively shopping with your credit card is the reason you're in a debt trap, and saving is important for your financial wellbeing.

But what happens when you see that fancy gadget or a gorgeous pair of shoes?

You guessed it!

So in this article let's go against your myths and assess if you really need financial planning.

  1. "I'm never going to die": Yes, you may consider yourself a character in Ekta Kapoor's serial, where you resurrect roughly 4-5 times. In such a case, buying term insurance to secure your family's future may seem pointless. You can simply come back from the dead every time your family is suffering from a financial crisis.

    But that's not how real life is - it's unpredictable!

    A majority of Indians still believe term insurance to be a waste of money, and instead fall for ULIPs or money back policies. They fail to understand a very simple principle of term insurance i.e. indemnification of risk. A Term Insurance plan is designed to offer financial security to the family members, in case of death of the breadwinner of the family. By spending a few hundreds a month, you can safeguard the financial future of your family.

    [Read: Why Endowment Plans are Useless: A Case Study]

  2. "I don't need a contingency fund": You may be the sibling of the richest man in Asia and he may bail you out in case of any temporary liquidity crisis. Therefore, building a contingency fund is a big waste of your time and efforts, in your opinion.

    But what if you are not?

    You need a dedicated corpus that can cover 6 to 12 months of regular monthly expenses (including your EMIs). This money should be parked in a saving bank account, fixed deposit in a bank and/or liquid fund, so that God forbid, you can handle contingent situations well. Because we don't know what destiny has in for us. In case of medical emergencies, loss of job, natural disaster, this rainy day fund can be your saviour.

    [Read: A 3-Step Guide to Building A Liquid And Secure Emergency Fund]

  3. "I think Asset-allocation is all hocus-pocus": You may believe in not diversifying the investment portfolio, and instead prefer putting all your eggs in one basket. But the fact is, asset allocation is the cornerstone of financial planning. Asset allocation is a strategy by itself wherein you deploy hard-earned money in different asset classes' viz. equity, debt, gold and real estate, which in turn helps reduce the risk and optimise the returns of your overall portfolio and helps you be more attuned to your financial goals.

    [Read: How Financial Health Should Determine Your Asset Allocation]

    The fact is asset allocation isn't hocus-pocus but the essence of investing.

  4. "I have no financial goals": You may have renounced worldly responsibilities and have taken sanyasa. So you don't care about your children getting top-notch education or your daughter having her dream wedding, or your wife's wish of going on international vacations. Or in all probable reasons, you are single.

    Robert Bryne said, 'The purpose of life is a life of purpose'. In order to reach your destination, you first need to define your destination.

    The fact is every individual has certain financial goals (knowingly or unknowingly) because we all want to climb the psychological pyramid of happiness. But if we don't know where we are going, how are we supposed to get there? And, how will we know when we have arrived?

    Hence you ought to define your financial goals meaningfully to achieve them.

    [Read: Here's What Could Make Or Break Your Financial Goals]

  5. "Retirement planning is for old people": You may consider yourself too young to think about retirement planning. But time is ticking fast, and with that inflation even more which effectively erodes the purchasing power of your hard-earned money.

    With life expectancy gone up, you need to start thinking about your retirement plan right since you earn your first paycheck.

    The sad truth in India is that almost 40-45% of the retirees have to re-join the workforce in the first 6-8 years of their retirement.

    That's the time they start to realise that keeping their retirement benefits in a Bank FD has resulted in inflation eating up their hard earned money. To compensate for the loss of their hard-earned money, they have to work extra hard even after retirement age.

    So, if there is no concept of a perfect retirement, why does everyone bother with retirement planning? Just because a happy and blissful retirement is beyond the grasp of 45% of Indians, it doesn't mean that you can't be a part of the remaining 55% of Indians who have achieved their 'happily ever after'.

Think about this...

A person needs to be really naive to not understand that financial planning is the fundamental step to achieve domestic and spiritual bliss. So, perhaps it's time to reconsider your 'I don't need financial planning' mentality and take the first step towards financial freedom.

As you take this first step towards financial freedom, be rest assured that PersonalFN will take the utmost care of you and your financial aspirations. As pioneers in financial planning for nearly two decades, our experience has helped us acquire diverse knowledge and expertise in handling an individual's financial insecurities, goals, and aspirations.


If you wish to enlist our nearly two decades of experience for your financial planning needs, get in touch with PersonalFN's Certified Financial Planners on 022-61361200 or write to info@personalfn.com. You may also fill in this form, and soon our experienced financial planners will reach out to you.

Till then, happy financial freedom!

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