Financial planning is essential to secure your long-term financial needs. This is usually done so that you can achieve your investment goals and help you achieve your financial goals.
At the same time, a financial plan also needs to be revised from time to time, and an emergency is not the only event that requires a change to your financial plan. Other events that may affect your financial plan and require reconsideration may include having another child, a new job that pays more than your current job, or receiving an offer to move to a foreign country. All of these situations may also require a change in financial planning.
In this article, we will discuss three situations where you need to review your financial plan.
1. You are considering getting a big loan
When a person applies for a loan for a major purchase like a house or property, it is necessary to analyze their financial plan. You need to check your wallet before applying for a loan and after the start of the EMI.
Before applying for a loan, you should review your assets to determine how much you want to make as a down payment. Meanwhile, once the EMI begins, you should review your financial plan to determine how much you can invest for other goals as your savings might decline due to the home loan.
2. Change in income
Positive income developments, such as a salary increase, increased business income, a second income, etc., allow you to contribute more to your financial goals and achieve them faster.
A salary increase does not always mean an increase in expenses. As your work progresses, you can save more money to invest, which can be done effectively by reviewing your financial strategy.
On the other hand, many people lose their jobs, make mid-career changes, and face other consequences. Financial strategies must also be evaluated in these difficult conditions.
3. Change in health status
Life is uncertain and everyone knows it. Even the most health-conscious person can be diagnosed with life-threatening illnesses such as cancer, heart disease, chronic lower respiratory diseases, and more. Alternatively, they may be involved in an accident that leaves them permanently disabled.
These conditions, or deficiencies, are expensive to treat. Additionally, they can affect a person’s work productivity and force them to reduce their working hours. This could result in loss or reduction of income.
In these cases, it is essential to review your financial strategy and modify your investment objectives.
