Personal finance: Why Is It Important?

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Marketopedia / Importance of Personal Finance / Personal finance: Why Is It Important?

When you reflect on personal finance, planning your finances for the present and future usually comes to mind. Although some are confident that they can navigate this without any extra help, others seek out a financial advisor to guide them through it. Personally, I’m not a proponent of relying on a financial advisor to design a plan for you and your family; rather, I believe you can do this independently.

Ultimately, you are the one who is most familiar with the needs of your family. As such, you can determine what is beneficial for them and what isn’t. Not only do you strive to fulfil their current needs, but also envision a safe future for your family.

Your ‘Financial Advisor’ won’t be doing any of this.

He is likely intent on selling you a financial product that will grant him a good profit. He will apply the same to you and his 20 other clients.

Ultimately, it’s up to you to secure your family and your financial security. Don’t forget – this is called ‘Personal’ finance for a reason. It should be kept private and managed with attention and diligence.

This endeavour does not require any rocket science; having the capacity to do basic arithmetic will get you halfway there. The remaining task is simply putting that knowledge into practice in order to distinguish between helpful and less fruitful elements.

The purpose of this module is to help you with these decisions. By the time you have finished, you should be able to accomplish the following:

– Gain a more profound comprehension of financial products and the intricacies behind them.

– Establish a monetary target and strive to attain it.

– Recognize any financial struggles, and take action to fix them.

Let’s get started!

I’m not prepared yet

It took a great effort to get my first job, as I spoke to many people for about eight months. In the end, I was fortunate enough to be employed, and my first ‘job’ couldn’t have been more special. A month later, when I received my paycheck, the feeling that came with it was unparalleled: excitement knew no bounds. However, it also came with a sense of responsibility.

I had a lot of goals for my first paycheck. I bought a saree for my mom and took my fiance (now wife) out for dinner. It’s always gratifying to be able to provide for those you care about.

After all was said and done, I still had a bit of money left in the account.

My friend advised me to invest the money I had, but I thought that it was not a huge sum that will make any difference, so I brushed away his advice. Still, I decided that from next month onwards, I would start putting some money aside.

As expected, the next month was similar. I had spent all my salary and couldn’t set anything aside, a story that repeated itself for years, not allowing me to save even a rupee.

I regret not beginning to save earlier in my life; it’s easily one of my greatest regrets.

Most of us can probably relate to my situation. We tend to ignore saving because the amount we want to put away is small, and invariably wait for a larger sum before embarking on our savings journey.

Unfortunately, we’re rarely in the practice of saving early on in life, and this tends to be a reoccurring issue.

I strongly encourage you to save any amount, no matter how small. Doing so will have a great impact on your financial future.