Financial Planning for Families - Comprehensive Guide 2024

Financial planning is the backbone of a financially secure future and the path to achieve every financial goal. It is a process by which an individual prepares a blueprint to meet every expected and unexpected event that can affect the future of the individual and his/her family. It is vital to indulge in financial planning to protect the loved ones financially from any negatively affecting eventuality and to build wealth in the process.

As the year is approaching its end, a complete guide to financial planning in 2018 is given below:

Make a Financial plan with SMART Financial goals

An ideal financial plan provides for SMART financial goals. Which means the goals should be:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

You can start with the goals you think will be most relevant for you and your family in the future like saving a certain amount for your child’s education and marriage, investing a specific amount in  retirement planning or buying a house, etc. Whatever you will do from this point, will be directed towards achieving your financial goals.

Start saving

Once you have made a financial plan and set your goals, the next thing you should do is to start setting aside some money every month so that you can invest them in investment products to build wealth. Saving money is the most crucial step in the process of financial planning as an ideal financial plan requires you to invest in insurance and financial products. The more money you will save every month, the more money you will be able to invest, which is the only way you can achieve all of your financial goals.

By setting aside money to invest, you would have taken an important step towards financial planning, but as life is uncertain, there is a chance that an unfortunate event like death can occur way before you have achieved your financial goals.

Some of the investment avenues available are:

1. Equity: Commonly called ‘stocks’, it is the preferred choice of investment for high risk takers seeking above-average returns. However, financial experts have repeatedly suggested to not put all your money in high risk equity products.


2. Unit Linked Insurance Plan: A ULIP plan is a fusion of an insurance and investment product. ULIPs give market-linked returns and have a rough resemblance with mutual funds. By investing in a ULIP plan, you can build your wealth by investing a certain portion of your premium in funds of your choice. Apart from this, you also get tax benefits and a life cover with the promise of death and maturity benefit.


3. Term plan policy: This is a contingency plan to ensure that in case of an unfortunate incident, your family is taken care of. The insurance death claim can be utilized to cope with the sudden loss of income.


4. Bank Deposits: Although the real returns from bank deposits have been rapidly falling through the years, they still remain the safest investment product for a large section of the middle class.


5. Endowment policy: One of the best savings plans, an endowment policy provides a lump sum amount at the time or maturity or death, whichever is earlier. It is one of the best plans, often giving guaranteed returns and thus helps in achieving long-term financial goals.


6. Gold: Indian households invest regularly in gold to hedge against market losses, since gold has been a part of Indian gifting culture and has historically only seen price rises over the course of years.

Every insurance plan of Edelweiss Tokio Life comes with the facility of adding riders and Tax savings under section 80C and 10(10D).