Fundamentals of Financial Planning & Money Management: Simply put, Financial Planning is a means to bridge the gap between where you are and where you want to be. It is about prudent management of your finances in a manner that leads to the accomplishment of life goals. You may pursue life goals like buying the dream home, higher education of your children, retiring rich, going on an exotic vacation, etc. It is concerned with making wise money management choices today to enjoy a comfortable retirement tomorrow.
Financial planning is related to avoiding non-important & non-urgent expenditures today i.e. skipping eating out regularly at expensive restaurants or reconsidering the recent impulse to upgrade your new car, to achieve bigger and important priorities in life tomorrow. The Financial Planning process encompasses six steps as shown in the figure. Financial planning covers a wide variety of concerns namely money management, risk management, debt management, investment planning, tax planning, retirement planning, and estate planning.
Financial planning provides you with the ability to comprehend the impact of every financial decision on the end goal. For e.g., whether the purchase of a particular investment product would facilitate paying off the outstanding home loan liability or would push your age of retirement even further? In this manner, you would be able to envisage each financial action as part of the whole plan and foresee its short and long-term repercussions on your life goals.
A lump sum amount, accepted for a fixed period, at an agreed rate of interest where interest is paid along with the principal amount on maturity of the deposit, is called annual deposit or cumulative deposit. The fixed deposit interest rates vary on factors such as Government Policies, Economic Conditions, and the liquidity conditions in the market. But CREDITO INDIA NIDHI LIMITED Annual Deposit Scheme’s interest rates are fixed and those interest accrued is added to the principal amount yearly. In other words, the interest earned gets compounded on a yearly basis. Below we mentioned our annual deposit chart;