Do Your Financial Planning Early

Whether you're earning through a job, running a business, just starting out, or have yet to earn, understanding financial planning is essential. Often, our parents, schools, and colleges do not provide us with this crucial knowledge. But we should plan our finances well in advance and then need to strictly follow this plan.

1. Daily Expenses:

Your daily expenses depend upon your lifestyle, which means 'quality of life'. A major portion of your income is spent on day-to-day needs. Managing these expenses is essential, which is a part of the equation.

2. Future Needs:

Looking ahead, several significant expenses will arise:

• Children's Education: This encompasses school expenses over approximately 10 years and additional costs for college or university, which can last from 3 to 8 years.
• Plan for this in advance to be assured of a good education for your child without any strain.
• Children's Marriage: In India, weddings are grand affairs. Many parents save diligently for years, only to deplete these savings quickly. Some even incur loans to cover these marriage costs. Adequate planning can help manage these expenses without financial distress.
• Retirement: Most people, particularly those under 35, may not fully grasp how much money is needed to maintain their quality of life after retirement.
• More funds are needed for retirement as life expectancy increases proportionally to medical advancements. This challenge is exacerbated by the shorter working years due to a rapidly evolving job market.
   

3. Long-Term Health Care:

It is a point that should not be overlooked. Without separate planning for this, you might end up spending a significant portion of your retirement savings on medical costs. It’s wise to plan for these expenses well in advance.

4. Additional Quality-of-Life Goals:

Besides these essential expenses, several non-mandatory goals can enhance your quality of life:

• Buying a House: Whether building or purchasing, acquiring a home requires substantial funds.
• Buying and Upgrading a Car: Whether it's a two-wheeler or a four-wheeler, you might wish to upgrade every few years, which requires financial planning.
• Family Vacations: Regular domestic holidays and international trips contribute to a fulfilling life but need budgeting to manage these costs annually.
• Other Aspirations: These may include charitable works, investments in real estate, or creating some innovative entrepreneurship. passive income streams.
   

Importance of Early Planning:

Most people fail to plan for these expenses early enough. Only a small percentage of individuals globally engage in detailed financial planning and take consistent action. Many believe they can manage financial challenges with makeshift solutions, but this often leads to missed opportunities and inadequate preparation.

Reasons to Plan Early:

1. Manage Compulsory Expenses: Given the numerous compulsory expenses throughout life, early planning helps you address these financial needs effectively. Start it as early as possible that will be more beneficial for you.
2. Lack of Financial Education: While our education system teaches us how to earn money, it rarely covers how to manage, plan, or invest that money. This gap often leads to difficulties in financial management. Just as we consult a doctor when we're ill, consulting a financial expert—or a 'money doctor'—can help navigate these complexities.

Seeking Professional Guidance:

Many people bypass financial experts, opting to handle their finances independently. It may result in costly mistakes and missed opportunities. Engaging with a financial expert ensures you make informed decisions and have the funds necessary for future expenses. Relying on local solutions ('jugaad') will not be very effective.

Good financial planning will enable you to meet your goals. So, start your financial planning as early as possible and seek expert advice to secure your financial future.