Needless, to say that ‘budgeting’ can’t be separated from ‘financial planning’ as it is a key part of financial planning. But assuming that budgeting alone can help you realize your financial goals is misleading. This explains why budgeting can’t be a substitute for financial planning. Like other individuals, this holds true for the salaried class or the middle income group as well as they need to prepare a budget to control their household expenses and also need to have a prudent financial plan in place to make their future secure.
India’s middle-income group comprising 31.4 million households and 160 million individuals, are still financially risk averse and for them financial planning is not just about wealth accumulation. This section need to consider financial planning that covers all aspects of financial security like emergency funds, life & health cover, estate planning, investing and retirement income distribution etc.
Long-term investment options like PF, PPF, Life Insurance Premium, NSC and ELSS (Equity Linked Savings Scheme) investments in Mutual Funds can be used within the limit, to earn tax benefits, in addition to the return on investments. However, if you don’t want to take risks at all, then you can opt for products like FDs and PPF or the traditional plans of insurance companies like money back plans
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