Financial Planning

Understand what financial planning is and why it matters.
Financial Planning
3 min

Financial planning sounds like a complex concept, but it really boils down to making smart choices about your money so you can achieve your goals and live the life you want. It is a roadmap for your financial journey, designed to help you make informed decisions, build security, and prepare for the future.

What is financial planning?

Financial planning is the process that help you manage your money and reach your short- and long-term goals. It involves understanding your current finances, setting clear goals, figuring out your risk tolerance, and creating a plan. This helps you make smart choices about how you spend and invest your money.

Tip: For goals where safety and guaranteed returns are important, fixed deposit can be a reliable option as they offer guaranteed returns.

Why does financial planning matter?

  1. Achieving your dreams
    Whether it is buying a home, funding a comfortable retirement, or leaving a legacy, financial planning can helps make those dreams a reality.
  2. Unexpected expenses
    Unexpected expenses, health issues, or job changes can derail your finances. A solid financial plan helps you stay on track, even during tough times.
  3. Peace of mind
    Knowing you have a strategy for your money reduces stress and gives you a sense of control over your financial future.
  4. Avoiding financial mistakes
    a well-thought-out plan can help you minimise debt, save wisely, and make informed investment choices.

Financial planning types

  1. Investment planning
    Investment planning gives you control over your financial future. Choose the types of investments that align with your goals and risk tolerance. Explore options like mutual funds, NPS, ELSS, and others to create a diversified portfolio.
  2. Tax planning
    Tax planning is an important part of financial planning, helping you keep more of your hard-earned money. Strategic investments in options like tax saving fixed deposits, NPS, PPF, and ELSS can potentially reduce your tax burden.
  3. Retirement planning
    Retirement planning ensures you can retire on your terms. It involves calculating the funds you'll need to live comfortably after retirement and outlines how to invest now to reach that goal.
  4. Insurance planning
    Insurance planning is a crucial part of protecting your financial wellbeing. It involves identifying the types of insurance coverage that are essential for you (life, health, disability, etc.), and how much coverage you'll need to adequately protect yourself and your dependents from financial strain due to unexpected events.
  5. Planning for education funds
    Planning for education expenses is crucial as the cost of higher education in India has risen significantly. Planning ensures you can achieve your education goals, whether it's for your child's college or your own academic pursuits. It helps you save money for future educational needs.

Key components of financial planning

  1. Setting goals: Start by defining your short-term, mid-term, and long-term financial goals. Be specific - the clearer your goals, the easier it is to build a plan around them.
  2. Assessing your current situation: Create a snapshot of your finances. This includes assets (home, savings, investments), debts (loans, credit cards), income, and expenses.
  3. Creating a budget: A budget is your day-to-day spending plan. It helps track where your money goes and helps identifies areas where you can save.
  4. Managing debt: High-interest debt can derail your financial progress. A financial plan includes strategies for reducing debt effectively.
  5. Saving and investing strategically: Strategic saving and investing are crucial for reaching your financial goals. This is where options like fixed deposits come in. FDs offer a secure way to grow your savings with minimal risk. When choosing investment options, carefully consider your specific goals (like buying a house or retirement) and how long you're willing to invest your money.
  6. Protecting what matters: Protecting the things you care about is important. Insurance – whether it's life, health, or something else – acts as a safety net. It gives you peace of mind knowing that you and your family are covered if something unexpected happens.
  7. Planning for retirement: Starting early and saving consistently are key to a comfortable retirement. A financial plan helps you estimate your retirement needs and create a strategy to reach them.
  8. Estate planning: Estate planning goes beyond just writing a will. It involves carefully considering who will inherit your assets, whether you need to set up trusts or want to distribute it among your children. Taking these steps now ensures a smoother transition of your assets later.

Role of fixed deposits in financial planning

  1. Security and guaranteed returns
    FDs are known for their safety and fixed interest rates, offering a predictable return on your investment.
  2. Flexibility and liquidity
    While FDs are designed for a set term, many financial institutions offer options for premature withdrawal with penalties, providing some liquidity in case of unexpected needs. Additionally, FDs often have varied tenures, ranging from a few days to several years, allowing you to choose them according to you financial goals.
  3. Wealth accumulation
    Regular contributions to FDs help you grow your money steadily over time. This is helpful for milestones like a down payment on a house or building a child's education fund.

When considering fixed deposit as part of your financial plan, researching various providers is essential. Bajaj Finance Fixed Deposit are a popular option among investors. They hold AAA ratings from financial agencies like CRISIL and ICRA, and offer competitive interest rate of up to 8.85% p.a.

Seeking professional help

While you can create a basic financial plan yourself, consider consulting a financial advisor for personalised advice. They can help you create a tailored plan and offer guidance on investments, taxes, and other financial matters.


Remember, financial planning is not just about numbers; it's about empowering yourself to live the life you envision. Start by taking stock of your current finances, defining your goals, and exploring strategies to bridge the gap. The sooner you start, the brighter your financial future can be.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.