Ultimate Guide For Future Financial Planning
Looking for ways of saving for future financial goals for yourself? Don't worry, you are at the right place. Your future depends upon the financial planning your do today- be it saving or investing Here’s more about it.
Once you reach retirement age, life won’t be the same; and neither will your wallet. As you watch your life go by, you’ll see how much you’ve spent and how much you’ve saved. Having a retirement corpus and plan helps you by keeping your life post-retirement happy. You don’t have to worry about your spending as you have enough money to spend.
This planning should ideally begin as soon as you start earning. But, the early 30’s is a good age to begin future financial planning. Now it’s natural that you are unsure about the areas of investment. “What’s best for my retirement”, “how to plan financial goals”, and similar questions are common.
If you are aware of the options, it becomes easier to choose from them. You must be aware of the current financial ability you have too. Many people also look towards future financial planning as they look for ideas on how to retire early. It suits your financial health, and it's a great match to start today.
Here are some of the best options for future financial planning for you! But before that, here’s one thing we want you to understand.
Financial Planning For Future V/s Money Saving For Future
One must understand the difference between financial planning and money saving. Money-saving options are usually a part of financial planning options, but the opposite is not true. Understanding the difference helps you decide on how you choose to save for future financial goals.
In simpler terms,
|Your current income= is Rs.10,000/month
|Budget for future financial planning= Rs.2000/month
|Divide this amount into your plans.
|Equity Fund = Rs. 400
|Savings Account= Rs.1000
|And so on…
Equity is an investment sphere, whereas a savings account is a money-saving option. But, when you combine all, it's the financial planning area.
Usually, the amount invested + the amount saved = The total amount for a future financial plan.
How To Plan Financial Goals
While doing future financial planning make sure that your goals are
- Time Specified
- Reason specified
- Quantifiable in monetary terms
It is also important to tailor your goals to the timeline of your life, based on your age, your wishes, and your future trajectory. You may be planning to get money at 65, but you might need it before that. Ensure that you invest in multiple spaces so that you have the flexibility of getting money whenever required.
Also, divide your investments into both short and long-term (This is majorly the time frame of the investment to get the returns). It is important to review your entire plan at regular intervals, as many factors can affect it, such as inflation, change in goals, financial situation, etc.
Saving For Life After Retirement: Options
Saving for future financial goals is one aspect of financial planning. Other areas require you to access your financial capabilities, risk appetite, and corpus you wish to create. Some of the options for saving for future financial goals are:
You can invest in the shares or debt instruments of a well-known company if you know the share market and are ready to have a long-term investment. Shares give you ownership rights usually with a profit percentage, whereas debt is usually a loan that gets you fixed interest. You can get an expert's help and understand it better, and invest according to your risk appetite. One thing to note here is that the share market is volatile, whereas debts have a certain lock-in period. Read carefully before investing.
Systematic investment plans or mutual funds are a great way of investing in the market without having to put all money in one specific company/instrument. Some fund managers take monthly payments for you and invest that in various companies. One thing to note here is that the return is assumed, not guaranteed and you will have to bear the amount of brokerage. The return depends on the market conditions. Invest carefully only after understanding the funds.
When you choose gold as an investment, you choose to invest in an asset that has great returns and is safe.
Source: gold price
You can invest in physical gold, digital gold, and even the gold market (commodity market). A good indicator of whether to invest in gold is the average return rate. Moreover, you can use the gold as an heirloom too. Gold is a traditional Indian way of saving money and is easily converted into a cash asset. Start saving in gold and reap the benefits.
Many money-saving instruments can be used when looking for options for saving for future financial goals. These instruments are namely-
- Fixed Deposit/ Recurring Deposit
FD and RD are great ways of savings when one talks about short to long-term investments. These instruments have flexibility in terms of the amount invested, period, and rate of return. You can even break them before the due date, but won't be able to use the interest generated. These instruments do not have a similar return to gold.
There are various insurance plans that you can invest in. Health and life insurances are a good way to invest in your future. We suggest that you take the help of someone knowledgeable before you finalize any plan. Do not fall into the trap of agents that promise you great returns.
The best way of saving is where you have the flexibility of deposit, amount maintained, and the period. A savings account with a few months’ expenses can help you keep some cash handy so that you can save as per your financial health. Savings accounts have low-interest rates, so keeping all money here, isn't the most suitable option. You may pair your savings with digigold as it is a great option for returns and is a great saving asset pairing.
- Government Schemes (Senior citizen saving scheme, PPF, National Pension System)
One of the best ways to save for your retirement (other than gold) is via government schemes. Some of these give you tax benefits and keep your money with a trusted entity (the government itself). All the instruments have their lock-in periods, interest rates, and benefits. Check out the benefits before you invest. There are many government yojanas, so check all options before investing. Please note that all the yojanas are not always available, and you will have to wait for them to be over to get your money. Invest only that amount, that you are 100% sure you won’t need in the short term.
When you plan to invest in your future, start investing early so that you don't have to wait for maturity for a longer time. Using a mix of various plans for future financial planning is a smart move, as it allows you to invest in various spaces, reduces the risk involved, and provides money at different life stages. Remember: Whether you check for reasons to invest in gold, or any other asset- ensure that it fits your wallet. If you wish to enjoy life post-retirement, start saving for future financial goals today!