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Some developments in the markets, changes in your financial requirements and investment profile call for reviewing your financial plan. You may have to make changes in your financial plan for your benefit in such instances. We have covered the following in this article:
Most employers provide their employees with a hike in their salaries every year. The appraisal process is conducted mostly in March in India, and the employees will be getting their revised salary from the following month, which is April, the first month of the new financial year. It is crucial to increase your investment whenever you get a pay raise.
You have to redraw your finances to accommodate the increased budget towards investments after your pay revision. Remember, the more you invest, the faster you will achieve your financial goals. When you have got the opportunity to invest more, it would be wise to grab it.
Challenging situations call for desperate moves. If you availed of a loan, then the primary focus should shift towards repaying it at the earliest. The longer you take to repay, the more you pay as interest towards the loan. Therefore, you may have to curtail your budget towards investments as you will need more money to cover the equated monthly instalments (EMIs) and living expenses.
A major life event such as getting married or having children will call for a severe revision of your financial plan. In such cases, the responsibility on your shoulders increases. You may have to avail of a term life insurance policy, include the new family member under the existing health insurance policy or even purchase a new one. Naturally, you will have to pay higher premiums.
A financial crisis resulting from adverse developments such as job loss or hospitalisation of self or a family member will leave you with financial difficulties. In such cases, you likely have to pause or stop your investments from raising funds to cover the given contingency. It is for this reason that financial planners insist individuals on building an emergency fund.
Having an impeccable financial plan is essential in the modern world. However, you may not follow the plan at times due to various reasons, some of which are beyond your control. You have to be smart in handling your finances whenever there is a change in your requirements.