Education & Planning the key to acheving financial security

While all of us would love to be financially secure, many of us believe that financial security is a very difficult goal to achieve. Some see it as a goal which can never be achieved. Irrespective of all the challenges which come in the way of financial security, it surely is an achievable goals for all.



The perception of what constitutes being financially secure varies individual to individual, however there are some common themes in our definition of financial security. For a typical individual who is a part of the educated urban/semi-urban Indian middle class the definition of financial security would mean

• A stable employment with a growing salary
• Home ownership
• Money for retirement
• Money for children's education and marriage
• Not having day to day worries about money
• No EMI's to worry about 
• Enough savings to manage unforeseen / emergency scenarios  
• Owning a business 

While the list of things which would make us financially secure is indicative an may not be comprehensive, there is a simple approach towards working achieving financial security. The simple steps of this approach include:

1. Define: Define what constitutes financial security to you. The definition of your financial security should be so clear in your mind that you should be able to write it very precisely on a piece of paper. For e.g. saving for retirement may be very important to someone.
2. Set Goals: Based on your definition of financial security set up monthly goals for yourself.Goals should be well defined and measurable and have timelines associated with it. For e.g. I will have retirement fund of Rs X by year 20XX. 
3. Educate: This is the most important part of any plan for achieving financial security. Educate yourself on the various techniques and financial products available which will help you achieve your goals.
4. Plan: Based on the education you undergo, create the path  which would take you to your financial end goals. For e.g. I will invest Rs X every month in product X to reach my retirement funds goal
5. Monitor: Monitor your achievements against your plans. Be prepared to be flexible in coming up alternates if you are unable to meet you plan and goals.
6. Refine: Your outlook towards life may change with time so keep refining your definition, goals, education, plans and monitoring approach once every year.

While the approach looks simplistic, the mental effort which goes into adhering to this approach is enormous. If one is ready to put in the enormous effort which goes into adhering to  this approach, the dream of financial security can one day be surely attained.

The path to achieving financial security will be uncomfortable, it will take time (many years) and enormous effort. Yet it is not an insurmountable problem.