Why do people avoid financial planning

It’s an old adage that if you do not plan you are planning to fail. This is even applicable to your financial plan. There are many inhibitions from an investor’s perspective to start a financial plan. There are some common misconceptions why a financial plan is not on their priority list.

Fail to understand financial plan: Financial plan has gained traction in India in the last 5-10 years, however, most of them still associate financial plan as an investment in the mutual fund. Therefore either spare some time to know about the financial plan or go and see a financial planner who can explain what financial planning is.

You know but you do not believe: Some of you know what is financial planning but do not have much faith on it. Go and meet a financial planner and try to understand how he gives solution to your financial problems. You can even meet some clients to clarify your doubts.

Financial planning is only for wealthy people: Depending upon the services being offered by a financial planner, the charges can be anything upward of Rs. 20,000, which is out of reach for many common people who save only Rs. 20,000 every year. In this case, a financial plan will help you to increase your savings and direct your investments towards achieving your goals.

Financial plan means only investments: You are an equity research analyst and believe that you are good at investment and that’s all financial plan is about. Nonetheless, investment is just part of the financial plan and there is more to financial plan such as risk management, asset allocation etc.

You can do it yourself: You are good in Excel and very methodical, hence you can model your future earnings and expenses and design a financial plan. There is a lot more in a financial plan, which even includes your behavioural aspects that need to be anchored to make most out of a financial plan.