When we think about managing our personal finances, we often associate it with investing in gold, equities, mutual funds (through Systematic Investment Plans or SIPs), fixed deposits, and other traditional investment products. Whilst this perception is not incorrect, it reflects only one aspect of personal finance.
The encouraging part is that more people are becoming aware of different investment avenues and the importance of diversification. However, in the process, many overlook the true meaning of Financial Planning.
Simply put, “Financial Planning is a roadmap of achieving life’s financial goals”.
These goals may include buying a car, budgeting for next International travel, planning a marriage, saving for a child’s higher education plan, purchasing a home, or planning for retirement.
Financial planning is the cautious process of aligning financial decisions with short-term, medium-term, and long-term objectives while considering immediate cash requirements and expected expenses over the next six to twelve months.
Myth #1: Financial Planning is only for the Wealthy
One of the most common misconceptions is that financial planning is only meant for high-income individuals.
The truth is quite different! – Financial planning is essential for everyone, regardless of income.
The level of planning, intensity, and degree of financial planning may vary depending on the individual’s financial situation, priorities, goals, and investment horizon. Still, the need for financial planning remains universal.
A Real-life Experience
Let me share a real-life incident. One evening, while travelling home from work in a hired taxi, I overheard the driver discussing finances over the phone. Curious, I decided to start the conversation.
Me: May I ask you a personal question?
Driver: Sure.
Me: How much do you typically save after meeting all the daily expenses?
Driver: (After a brief pause) Approximately INR 600 per day
Me: What do you do with those surplus earnings?
Driver: Every week, we deposit the surplus into a savings bank account for the future child’s education.
Conversation continued, but one point stayed with me.
A typical savings account earns around ~3-3.5% interest annually, whereas inflation ranges between ~3.5-4%. This means that over time, the purchasing power of those savings gradually declines, and we are not even realising it.
This is not an isolated case. Millions of individuals unknowingly lose wealth simply because their money is not allocated according to its intended purpose. It is important to understand that this is not a fault of the savings account. A savings account is designed for liquidity and emergency access to funds—not for building long-term wealth.
The real issue is a lack of awareness. Not every rupee should remain in a savings account. Different financial products serve different purposes, and selecting the right product depends on your financial goals, time horizon, and risk appetite.
That understanding is the essence of financial planning.
Financial Planning is for Everyone
Financial planning does not distinguish between the rich and the poor. It is not determined by how much you earn, but by what you want to achieve in life. Whether your goal is to build an emergency fund, educate your children, purchase a home, retire comfortably, or simply manage your monthly finances more effectively, financial planning provides the roadmap to get there.
On this website – FinDiligent.com, we will gradually build the foundational blocks of personal financial planning—from budgeting and emergency funds to insurance, investments, taxation, retirement planning, and estate planning—helping you make informed financial decisions at every stage of life.
Because financial planning is not a luxury reserved for a select few. It is a life skill that everyone should possess.