Financial Plan implementation requires stepping out of comfort zone

Judicious Financial Plan implementation processes and review at regular intervals makes your journey towards financial freedom less disruptive.

It’s the tendency of any human being to stick to one’s own comfort zone. It’s really difficult to leave your comfort zone. To you, comfort zone is safe and comfortable. Although, from your experience you may have identified that the path you were following is not appropriate. You may know that you have to change your action plans and get on the correct path to reach your life-goals. But you may not know how and where to start from. Therefore, you contact a professional coach who can guide you rationally in life.

Similarly, when it comes to reaching your financial commitments on time, you should ensure prudent Financial Plan implementation. You may not fulfill your financial commitments by randomly investing money in financial products. You need to know your purpose of investing, where & how you need to invest and what are you expecting from your investments. For that, you must follow a Financial Plan. A Certified Financial Planner writes a Financial Plan for you. You attend Financial Planner’s sessions for Financial Plan implementation. But in most of the cases, you may listen to his advice but you fail to keep practicing the same. You need to practice the changed action plans till it becomes your habit and thereafter it becomes your character. You have to come out from your comfort zone. When you leave your comfort zone, your life-journey towards wellness begins. It’s all about patience and then only you can fulfill your financial commitments on time without much disruption.

In most of the cases, you may want to take rational decisions about your personal finances, but at the time of Financial Plan implementation, you become emotional and thereafter act wrongly. Your Financial Planner collects both qualitative and quantitative inputs and writes unique Financial Plan for you. You have to translate the plan into action with periodical reviews. As your SEBI Registered Investment Advisor in Kolkata, we will take you through hand-hold processes at all times in this regard till you reach your goals.

Indian adults rarely care about credit, saving, investing, spending and retirement readiness. A Financial Planner works for the benefit of individuals, families and the nation. Ultimately, the financial planning processes help young Indians to develop as financially capable citizens. 

Change means learning of new skills or forming new habits that have to be managed and maintained to achieve wellness in life. Change is an integral part of life and it’s not a threat to your well-being. Change refers to an opportunity to grow with innovative ideas and strategies.

Four main reasons why we don’t welcome change during Financial Plan implementation

1. Lack of our understanding;
2. We are not mentally prepared;
3. We want the results but do not want to follow the detailed process &
4. We run after instant gratification.

Stepping out of your comfort zone during Financial Plan implementation processes

First of all, you have to break your past routine; you have to get out of a rut. Absorbing new things are tiring and you may be overwhelmed. You may feel uncomfortable although you can uncover new opportunities. Change is frightening at times, but we shouldn’t be so fearful of it. Why is it frightening?  Is it because you need to adopt new processes? Humans naturally prefer to stay in comfort zone.

Personal finance is neither taught in school nor in college. When you enter into the professional world, you tend to follow others (may be parents, relatives, friends or office colleagues) when it comes to investment, saving, insurance, house building loan, car loan etc.

At best, your parents may advice you not to spend too much, but to save some money every month.  Neither parents nor anyone else may have a formal approach regarding spending and savings. You may have certain financial goals. But you fail to identify the inflated or deflated amount you may need and also you fail to fix the time frame when you need the money. Once you do that, you need to know how to achieve your target without undue risks.

Personal finance is a complex subject and unique too. Rule of thumbs may not be suitable to your needs. Often you tend to follow rule of thumbs due to your ignorance. Also, if you ignore time value of money, you’re misled.

Importance of time value of money

The money you have in hand right now is worth more than the same amount you may receive in the future. One reason is inflation and the other is you mayn’t have the same earning capacity. Money can generate interest or capital gains from investments. So, the value of money is more if you receive it sooner.

We have experienced that few clients don’t follow the Financial Plan. They are stuck inside their own comfort zone. They think that they will be able to take steps soon in future to fulfill their financial commitments. But, that time to recoup doesn’t come.

Follow your Financial Plan judiciously

In a planning for your finances, the client has to follow all the following personal financial aspects judiciously with the assistance of a qualified Financial Planner.  He must review the Financial Plan periodically for updating the personal and macroeconomic factors within the Plan.

1. Quantify and prioritize your goals
2. Follow family budget
3. Maintain income & expenditure statement (Cash flows)
4. Assess your assets & liabilities statement (Net worth)
5. Do risk analysis & insurance planning
6. Update details of Fixed Deposit, PPF, PF, NPS, Employment Benefits – EPF, Pension, Gratuity, Superannuation, Post office savings, Mutual Funds, Shares etc
7. Maintain contingency funds
8. Financial Plan implementation steps
9. Make children’s provision
10. Update on residential flat/house purchase, car purchase etc.
11. International Vacation
12. 5  years projected cash flow
13. Risk Profile etc.

There are too many unique concerns. As Certified Financial Planner in Kolkata, we focus in addressing those concerns to give you peace of mind.  An adult hardly can be taught. In our experience, we have observed it requires lot of honest practice. They want to stay in their old thoughts. As professionals, we intend to hand-hold them to various financial planning processes to ensure they can reach or fulfill their financial commitments on time.

As Financial Advisor in Kolkata, we recommend details in Financial Plan. But a few don’t follow them and even avoid coming forward for reviews. They tend to go back to their old habits.

We intend to make the action plans comfortable for you during Financial Plan implementation. You have to protect your finances against uncertainty. Your unique financial principles/believes shall never change or become irrelevant.

Do you have specific answers to the following unique questions?

1. What are my goals in life?
2. What is my current cash flow?
3. As per my life stage when and how much money do I need?
4. What’s my risk-profile, i.e. how much risk I can tolerate and my willingness to take risk?
5. What is my net worth (what you own minus what you owe)?
6. What are my investment vehicles?
7. How much financial loss will my family incur in case of death?
8. Am I comfortable with my Financial Plan?
9. Do my family members know about our Financial Plan?
10. Am I comfortable while following Financial Plan implementation processes?
11. Am I reviewing my Financial Plan at regular intervals?
12. Has anything changed? If so, have I incorporated the changes in my Financial Plan?

Professional guidance of a Certified Financial Planner and SEBI Registered Investment Adviser will make your journey towards financial wellness less bumpy.