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Financial planning is never about the amount of return, instead it is more about achieving those tough financial objectives with ease. Often people are confused by the words such as returns and financial goals. However, there are certain unheard benefits associated with financial planning as well.

Here we take a look at them:

1. Assets due to their high cost usually attract liabilities in the form of loans or borrowings. These loans and borrowings create a fixed burden, which in turn might hamper future savings. A financial goal can help you plan these asset purchase in advance burden free by allocating a small amount every month in certain investment classes. Thus, by disciplined investment in an appropriate avenue, buying a car without any loan is very much possible.

2. Financial planning is not just about investment but also about insurance coverages to protect your loved ones, in your absence. With uncertain life conditions, family and dependents cannot be left stranded in your absence. In addition to that, there is child education, marriage, parental medical expenses which cannot wait, hence having a sufficient corpus should be kept ready. Financial planning helps you plan your future today and help eliminate the risk caused by uncertainties. There is always an option of pause in financial planning (although not recommended) in case of an untimely mishap.

However, such option is not available in case of liabilities, where EMIs are to be paid irrespective of any mishap. There is a certain amount of flexibility available when your purchasing is based on ‘save first buy later’ option. Therefore, any impact of an unwanted event could be dodged if planning is done beforehand.

3. One may wonder what focus and motivation has to do with financial planning, however it is pertinent to note that, financial planning is not a onetime activity, it rather the exact opposite of it. Financial planning pertains to consistent, life long and disciplined efforts to attain the financial objective. These financial objectives give a sense of satisfaction which no other thing in the world could offer. Therefore, efforts put in achieving these objectives, could keep the investor motivated all the time and avoid unnecessary splurge of expenditure, which one may regret in the future.

4. What amount of money is good for retirement or such other financial objective is a debatable question. For example, if you want to buy a car, there is no maximum limit to the amount you can spend to buy it, thus making any investment or return calculation useless. Every individual has a certain standard of living, which cannot be compromised, therefore any return on investment that can match (if not surpass) such standard of living could be termed as a success.

5. Financial planning after ascertaining your requirement guides you through to the perfect alternative investment option, which helps you sustain the same standard of living in future albeit any financial objective. Thus, financial planning helps you concentrate on your work, and progresses silently towards achieving your objectives.

(The author is founder, Money Mantra. Views expressed are personal)