The start of a New Year is associated with several things – bidding adieu to the year gone by, looking forward to what the new year could offer, and setting an agenda for what you would like the new year to be.

A lot of us set goals for the year – the most common among these being related to health and fitness, travel, or buying something that you have wanted for a while. Some of us also aim to save up a certain amount for a specific goal.

How about making financial planning your resolution for 2023?

Let’s understand this better.

Simply put, financial planning means evaluating and accessing your current finances – income as well as expenses and planning your savings and investments in a manner in which it can help you meet your financial goals.

While savings is a helpful habit to start with, financial planning takes it a step forward as it is more comprehensive and takes into account several other aspects which include tax planning, insurance and health cover, estate planning and retirement planning.

So if you are planning your finances, you would not only know how much you need to save for your child’s marriage, but also know how much is an adequate cover for life insurance, and how you should plan your estate etc.

Creating and maintaining an emergency corpus of funds, budgeting, and reviewing one’s portfolio and making changes at periodic intervals if needed would also be a part of this financial planning.

How does financial planning help?

There are several benefits – you would know what your short-term, medium-term and long-term goals are, and you can regularly review and monitor its progress.

If needed, you can cut down on the spending in certain areas which can help you reallocate funds to other areas.

Financial planning will also help you in dealing with any crisis more effectively, as you would be updated with all your finances, and can make a decision about how money needs to be managed.

There are several other benefits to financial planning, and you should definitely consider making it a resolution for the upcoming year.

And on that note, wish you all a very happy New Year!