“Do not save what is left after spending, but spend what is left after saving.” — Warren Buffett
This is where the power of compounding comes in. It’s the most crucial principle in financial planning. Every month you delay is a month lost in the race against time. As Warren Buffett wisely says, “The stock market is a device for transferring money from the impatient to the patient.” If you want to build wealth, patience is key—and that starts with taking action today. If financial planning is so important, why do so many put it off? Here are the most common excuses: “I don’t earn enough right now.” “I’ll start once I’ve cleared my loans.” “I’m too young to worry about retirement.” “I’ll think about it after my next salary raise.”
These excuses make waiting feel easier. But delaying financial planning doesn’t just mean a slower path—it often means a much longer road to financial freedom. Every excuse today is an obstacle preventing you from reaching your financial goals tomorrow. What Financial Planning Really Is (and Why It Matters) Financial planning isn’t just about saving money; it’s about creating a system that works for you. It aligns your actions with your long-term goals, one decision at a time.
Here’s why it matters: 1. It Prepares You for the Unexpected Life throws curveballs—a job loss, a medical emergency, an economic downturn. While we can’t predict these events, we can prepare for them. A good financial plan includes an emergency fund as a safety cushion.
2. It Secures Your Future Many assume that saving a little each month will be enough for retirement. Without a plan, they often find it’s not. Financial planning helps estimate how much you’ll truly need and sets you on track to meet those goals.
3. It Shields You from Inflation ₹50 lakhs might sound like a lot today, but in 20 years, it may not sustain your lifestyle. Proper financial planning accounts for inflation, ensuring your wealth grows at a pace that keeps up with rising costs.
4. It Helps You Avoid Bad Debt Without a clear plan, it’s easy to fall into debt traps. Financial planning teaches you to spend less than you earn, save consistently, and make smart, long-term decisions that reduce unnecessary debt.
5. It Gives You Control The ultimate goal of financial planning is freedom. When you take control of your money, you’re no longer at the mercy of your paycheck. You can make choices based on your values, not just your bills.
How to Build a Financial Plan That Works
Getting started doesn’t require a big overnight change. Financial planning is about small, consistent habits that compound over time.
Here’s how to begin:
1. Assess Your Current Financial Situation Before creating a plan, evaluate where you stand: What are my income sources? What are my regular expenses? Do I have debt, and if so, what’s the interest rate? How much have I saved and invested?
2. Set Clear, Achievable Goals A goal without a plan is just a wish. Break down your financial aspirations into short term (e.g., buying a car) and long-term (e.g., building a ₹10 crore retirement fund). The clearer your goals, the more likely you are to achieve them.
3. Create a Budget and Stick to It A budget is a powerful tool. Start with the 50-30-20 rule: 50% for necessities 30% for discretionary spending 20% for savings and investments
4. Build an Emergency Fund Save 3 to 6 months’ worth of living expenses in an easily accessible account to serve as a financial cushion.
5. Start Investing Wisely Saving is crucial, but investing is what grows your wealth. Start small and increase your contributions over time. Whether mutual funds, stocks, or real estate, consistency is key.
6. Get Adequate Insurance Financial planning isn’t just about growing wealth—it’s about protecting it. Ensure you have life, health, and disability insurance to safeguard your financial future.
7. Plan for Retirement Now The earlier you start, the easier it gets. Use tools like EPF/PPF, NPS, and retirement mutual funds to build your corpus.
8. Review and Adjust Regularly Life changes, and so should your financial plan. Review your goals and progress annually and adjust as needed.
Ask yourself: Do I have a clear financial plan for the next 10, 20, or 30 years? How long could I maintain my lifestyle if I stopped earning today? Am I investing wisely, or is my money sitting idle in a savings account? Is my family financially secure if something happens to me? If these questions make you uneasy, it’s time to act. Financial planning is for everyone, regardless of income level. The earlier you start, the greater the rewards.
What’s Your Next Step?
It might feel overwhelming at first, but a Certified Financial Planner can help navigate complexities, create a personalized strategy, and ensure your money works for you—today and in the future. If you’re interested in understanding how compounding works and how to become a Crorepati, visit www.crediblefinserv.in for interactive calculators.
For a consultation, reach out at arun@crediblefinserv.in. Follow us on Instagram (@crediblefinserv) for informative videos on wealth creation and financial planning. Start small. Start today. Don’t wait for a crisis to push you into action. The best time to start planning is now.
