Meeting Your 4 Financial Needs

Everyone wishes to lead a financially independent life. There are, however, four financial needs, which becomes utmost important to achieve financial freedom. DSIJ explains what those four needs in life are and how to achieve them.

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Financial planning has become a buzzword these days. Most of the financial intermediaries worth their salt call themselves financial planners and provide financial planning as a service in their basket of offering. The fact remains that financial planning service offerings are a major tool for them to generate income. But recommendations of products to investors, say for instance mutual fund schemes, are often biased in favor of their associations and this helps them earn higher commissions from their principal fund houses. Needless to say, that although not all financial planning firms follow a biased approach or practice in an unethical way, however there certainly is a conflict of interest in their functioning. Investment is just one part of financial planning. Financial planning is all encompassing and also includes increasing your savings, reducing your unnecessary debt, creating an emergency fund, buying family protection through insurances, and planning all your life goals including your retirement.

All the above services boil down to meeting your four financial needs. If someone is not able to identify and help you service these four financial needs then it's advisable to look for an alternative financial planner. It’s not just about identifying the four core needs but also quantifying them and choosing appropriate products that would help them overcome the fear of not achieving those needs. Further, in this story we would highlight the four most common financial needs and also at the end, would suggest how to achieve them.

Financial life stages

Now most of you may be losing your patience to know those four prime financial planning targets. Bear with me for a while. Before knowing what those targets are, it is important to understand what are the different stages in life and how these needs are associated with them.

Up to 25 years of age