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Financial planning is indeed a difficult path to walk on. But, when it is done and dusted, it is very rewarding. As a family, you should decide together about your financial goals and work together to achieve them. This article aims to serve as an investment guide for family financial planning.
Once you have a family, your priorities shift from spoiling yourself to taking care of your family’s needs. The same applies to your savings as well. When one has to consider family financial planning, they must factor in college expenses for their kids, their marriage, owning a house, medical expenses, retirement, etc.
How financial planning for your family works?
To ensure that your financial plan works for you, you need to invest in the right set of investments. With so many types of investments available to an individual, it is easy to get lost on where to invest money. Here are a few investment options to consider to strengthen your family’s finances:
Equities
If you are looking to make significant returns to achieve your long-term goals, then you should make equities your best friend. Equities are market-linked securities that invest in the stocks of several companies. Look for equities that have a good track record. However, be wary that a fund’s past performance is not a definitive indicator of its future performance. Instead evaluate the fund over different market cycles and compare their performance to the benchmark. Equities have the potential to generate significant returns over long period and produce inflation-beating returns. As equities are highly volatile, you must not be bothered by short-term inconsistencies and learn to be patient with your mutual fund investments.
Mutual funds
These investment options are perfect for individuals who Mutual funds are professionally managed investment vehicles wherein a fund manager pools money of several investors and invests it in several securities according to the objective of the fund. An investor can choose between different types of mutual funds that serve their financial goals, risk profile, and investment horizon. Investing in mutual funds not only helps to achieve significant returns against traditional investment options but also offers investors the ease of diversification.
Senior citizen focused investments
If you are the sole earning member of your family, it means that you have to lookout for your entire family, including your parents and kids. Keeping this in mind, there are several senior citizen focused investments available in the market today. Examples include Senior Citizens Savings Scheme (SCSS), National Pension Scheme (NPS), Fixed deposits, National Savings Certificate (NSC), etc.
Insurance
One of the most optimum ways on saving money is to avoid spending it as much as you can – this means reduced expenses wherever you can. This is where insurance comes into picture. You can take a good health insurance plan to avoid the huge chunk that goes towards medical expenses. While it may be taxing on your pockets currently, it will save you from significant expenses in the near future. Happy investing!
