alexa

Search in Indianmoney's WealthPedia

Home Articles Financial Planning for Teachers

Financial Planning for Teachers

IndianMoney.com Research Team | Posted On Friday, August 30,2019, 03:42 PM

5.0 / 5 based on 1 User Reviews

Financial Planning for Teachers

 

 

Nirmala is a successful teacher of 56 years and has gained respect for her services to society. She is very close to retirement. One day she happened to meet her former student Avinash, who was a financial advisor. She was very happy to hear of his achievements.

Being a financial advisor, he meets many people each day and educates them on the importance of financial planning.

Avinash asked his school teacher one simple question, ‘Madam, where have you invested your money? With a smile on her face, she replied, ‘I have not invested anywhere and just get the gratuity on my retirement’. ‘You could have done so many things in your life’, he replied. What could she have done? Here is what Avinash had to say.

Want to know more on Financial Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Financial Planning for Teachers

What is Financial Planning?

Teachers must pay attention to financial planning.  Hope you have watched the Hindi blockbuster movie ‘3 Idiots’. When Amir Khan was asked to define a machine, he said, ‘Machine is anything that minimizes the efforts of a human being’.

Likewise, in simple words, financial planning is a systematic process of managing money to accomplish short and long-term goals. For instance, if you want to buy your dream car and house, you need money. A person who doesn’t do financial planning may face financial distress and not be able to accomplish financial goals. Financial planning is important to everyone, including teachers. It addresses the following questions:

  • What are your financial objectives?
  • Where do you stand today as far as your financial objectives are concerned?
  • What is the action plan to achieve the goals you have set?

In Nirmala’s case, the scope of financial planning is limited as she is already 56 and would retire in 4 years. After her retirement, she depends on her monthly pension. With this income, she has to lead her post-retirement life. She would have been in a better position, financially, if she had done financial planning.

See Also: Importance of Financial Planning

Understand the Relevance of Health Insurance

Nirmala enjoyed a healthy life. If she had faced any major health issues, say heart ailments or a stroke, she might have missed out on high quality medical treatment. Unfortunately, many teachers working in rural areas do not avail health insurance, which is extremely important to protect their health. Insurance Planning is an integral element of financial planning.

What if you do not have a health insurance policy when you are diagnosed with a chronic disease? There are two possibilities:

  • You would have to borrow money.
  • You would have to compromise on medical care.

See Also: What Does A Financial Advisor Do?

Investments

Saving alone is not enough. You must invest. Make sure to invest based on risk profile. Invest in PPF, FD, NSC or Post office savings schemes if you are a conservative investor. Invest in equity like equity mutual funds or shares if you are an aggressive investor. Invest in mutual funds via SIPs. Do remember that equity is high risk at high return.

Retirement planning

Retirement planning is the process wherein an individual must determine his/her retirement objectives and formulate an action plan to attain those objectives. Retirement planning is important because of the following reasons:

  • The average life expectancy is on the rise.
  • No financial dependency on children.
  • Lead a stress-free retirement life.

Save for retirement on the first day of the first job. Never make the mistake of last minute retirement planning. You won’t have the time to accumulate a sizeable retirement corpus.

See Also: Financial Planning: Do it Yourself?

Final thoughts

Teachers must save, spend, borrow and invest wisely, tackle debts wisely and plan for a financially secure post-retirement life.

You May Also Watch

Iframe Content

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.

Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.

Be Wise, Get Rich.

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
CIBIL Meter
Get It now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.