Why Should You Be Your Own Financial Planner?

May 23, 2022 Mutual Fund

The start of a financial new year gives us an opportunity to devise a plan to manage our finances. You can start on a clean slate at the beginning of the new financial year, as it is an ideal time to finalise your plans for saving, investing, taxation and budgeting your expenses for the year ahead. And I am sure many of you may have already started streamlining your finances in the last month.

Recently, I met my aunt Geeta as she had some investment-related queries. She said, “Mitali, since your uncle passed away 2 years ago our finances is being managed by a professional financial advisor. He consults with me but somehow, I lack understanding the money management and end up relying on the advisor’s decisions. I want to be able to have an informed discussion with the advisor and make financial decisions on my own.”

To which I responded, “I understand your concern; it’s difficult for you to grasp the nuances of financial planning, and you want to know where your hard-earned money is invested and how it’s performing for you. Also, there must be certain fees that the financial advisor is charging for the advisory service. Well, to avoid relying blindly on your financial advisor’s decisions and to have a transparent view of your finances you may consider becoming your own financial planner.”

She agreed, “Yes, the service fees are expensive and sometimes it gets difficult to manage the finances with such fees and the rising prices of essential goods. Although becoming my own financial planner seems to be a good idea, it appears to be challenging with my busy work schedule and having a household with children.”

I replied, “Aunty, you lack financial expertise, which is why meeting with your financial advisor and making financial decisions is difficult for you. To comprehend the nitty-gritty of financial planning, one must be financially literate. You can instil excellent financial habits and establish effective money management skills with financial knowledge. You can easily become your own financial planner if you arm yourself with financial knowledge.”

“Alright, I do understand your point that I need to be financially aware and focus on enhancing my financial knowledge. But where do I start and how do I enhance my financial knowledge?” , asked my aunt Geeta.

You see, the major issue that many individuals have is their inability to organise their finances owing to a lack of financial knowledge, which has resulted in delayed and unplanned ventures into savings, investments, and financial planning.

Many of you, like my aunt, may like to have greater control over your finances but are unable to do so owing to a lack of financial knowledge. I suggest you PersonalFN’s latest special initiative, the “Certified Family Guardian” which assists you to gain financial literacy at your convenience and offers you an exclusive opportunity to learn the finer nuances of money management.

We at PersonalFN understand that not everyone holds financial knowledge. Here we encourage you to gain and enhance your financial knowledge that would help you become your own Financial Planner. You will understand the financial planning elements and could apply your learnings while making your financial decision.

Organised into eight modules with 24 extensive videos, ‘Certified Family Guardian’ will help empower you with financial knowledge and also provides you with sophisticated tools needed to get better at money management. Moreover, it also offers a host of other benefits to help you make informed investment decisions. Read here for complete details…

After listening to this, my aunt Geeta replied, “Mitali, this is a great solution to my problem. With only a few clicks and from the comfort of my own home, I can now focus on enhancing my financial knowledge and making smart financial decisions. I’m definitely going to enrol for the “Certified Family Guardian” programme today!”

Every individual needs to plan for their financial future, especially in these unpredictable times of growing prices, geopolitical conflicts, and so on. Prudent financial planning assists you in determining how much money to save, invest, and spend. Also, how you should plan to reduce your debt over the course of the year to eliminate your debt burden if any.

Right from building an emergency fund, to taking an adequate insurance cover, tweaking investments and tax planning, the beginning of the financial year is probably the right time to chalk out a plan and work on it throughout the year to meet your financial goals. As you gain a better understanding of the overall income for the year, you can update and improve your investment plan.

Being financially literate will assist you in effectively carrying out your financial and investment planning activities, as well as in being your own financial planner and making informed financial decisions.

Benefits of becoming your own financial planner:

• As most of your financial goals are towards the well-being of your family you need to safeguard your hard-earned savings from any dubious and unworthy decision that could affect your family's future. Thus, becoming your own financial planner helps you make informed goal-oriented financial decisions for your family as a financial guardian.

• Many individuals consider paying a fee to financial professionals to manage their finances since they lack financial expertise. However, with DIY financial planning, you save on the cost required to pay as fees to the financial advisor, investment consultants, etc., for the services provided by them.

• The pandemic has taught us all how important it is to be prepared for any unforeseen event. Every individual has experienced various financial hardships as a result of the pandemic, and as your own financial planner, you will place a greater emphasis on building an emergency fund, and handling your investments and finances yourself as compared to a third person managing your finances.

• Being your own financial planner eliminates the lack of transparency and ensures that you know where your hard-earned money is going. You could also confidently select and invest in mutual funds through a direct plan, which eliminates the need for an intermediary and allows you to buy mutual fund units directly from the fund house.

Properly managing your investments and making worthy financial decisions takes time, skill, and ongoing effort; it’s not a one-time thing. You can’t become a financial planner in a day or two. It necessitates a continuous effort and pursuit of knowledge. Reading financial books/news, listening to podcasts, enrolling in an e-course like the one stated above, and so on are all effective ways to improve your financial knowledge.

As a result, the more work you put into improving your financial knowledge, the more you will become a better planner and manager of your own money. So the solution is to look for a reliable source of financial information and to keep your knowledge up to date. Financial literacy is a life skill that attempts to help you better understand the complexities of financial planning, a skill that you must grasp to maintain sound financial well-being. Financial literacy will help maintain a secure financial future and prevent financial mistakes too.

So, this financial year you should aim to become your own financial planner!

This article first appeared on PersonalFN here