The moment we see the price tag on any item while shopping, everyone has one thought” ONE DAY Going to earn so much money that will purchase all the items without even seeing the price list”. But that “ONE DAY”, comes not in everyone’s life. Even after earning the same amount, some can satisfy their desires, needs, while the others have to sacrifice their desires.
Now the question arises, why even after having the same earnings, one is enjoying their life and the other is not. The answer is “Financial Planning”.
Before explaining the term Financial Planning, let me highlight 1 of the 5 teachings of Lord Mahavira, Aparigraha.
“Aparigraha refers to keeping the desire for possessions to what is necessary or important, depending on one’s life stage and context”.
In simple context to “buy what is necessary”.
Yes, this is the basic difference we see in successful people and the struggling ones (Can’t use the term Failures as no one is a failure in his life until and unless he loses hope). Successful one starts their planning in their initial life which the strugglers failed to do so.
Now, a question may come in your mind that what kind of planning are we talking about, and how is it that people after knowing that planning is necessary fails to do so.
Financial Planning is the process of meeting life goals with a systematic and disciplined allocation of funds. Personal finance is the management of your limited funds, keeping in mind your long term & short term goals. It encompasses budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning.
In layman terms, to spend after saving.
“Do not save what is left after spending; instead spend what is left after saving”, You are already aware of the person who has mentioned these golden words. Yeah, Warren Buffet.
But are you following this rule? Have a deep thought and then try to answer.
To know importance before taking action into anything is what we all are habitual of, so let’s focus on the importance of Financial Planning first-
- Helps in maintaining Emergency Savings – Someone has rightly said’ ‘First sign of Financial Indiscipline is the inability to maintain a minimum balance in your Bank Account”. A successful person always maintains the emergency savings which can be used in the worse scenario. Till the end of this pandemic, those who manage their finance will be able to survive easily as compared to those who spend on their desires more than what they save.
- Time becomes a ladder in multiplying wealth – Patience is the key factor for becoming rich. Everyone wants to earn fast money, and on the way to do that, they lose everything that they have. If you can do plan your finance for say 5 Years of, then after that money will work on its own. You will have a passive source of income.
- Financial Independence – people generally use to borrow money just for the status quo in the society. A person with no debt will always have a happier life and a good sleep which is what the need of life. A sound sleep is what most people miss and you should feel lucky if you are having one. Financial Planning can help you in leading a wonderful life.
The motive of the article was just to give the synopsis of Personal Financing. Articles on money, areas where you can invest, the importance of savings, Financing constituents are going to get published in the coming time.
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