Hello Readers!

Personal Financial Planning is something that we do to keep money matters smooth and in our hands. The main idea behind preparing a financial plan is to include all necessary payments and expenses and to pay them on time, in order to stay away from unnecessary debt which with prompt planning can be avoided. Perfect Financial Planning also helps us to invest in our goals.

Well, Personal financial planning existed from the time money came into existence in the world, and as it is so old, it is too surrounded by many myths. These myths do not only exist but to some extent, also restrict people from adding many necessary things in their financial planning like investing in a mutual fund, preparing an emergency fund and many. However, these myths have changed to a large scale over time, and people have started considering the importance of financial planning and its important elements.

Here I am discussing some of the myths related to Personal financial planning, read to know about:

Myth Number 1: There is no need of preparing an emergency fund, why are credit cards available? 

People do consider that there is no need of preparing an emergency fund if they have a credit card to swipe. But one must know, that every swipe you make with your credit card is building debt on you, which you need to pay back on time, and if not then be ready to pay the high rate of interest (up to 38%) on your debt from credit cards.

Also, emergency fund plays a vital role in maintaining your financial expense inflow, without any disturbances at the time of emergencies, like in case if you lost your job suddenly and you have expenses like home rent, loan EMI and more to pay, you can use your emergency fund to carry these expenses, but do remember your credit card cannot carry these expenses, at the time of emergencies.

Basically, having an emergency fund is a must, an emergency fund should have at least 6-9 months expenses covered along with the cost of the last emergency.

Myth Number 2: To Invest One Needs to Be Rich. 

People are often confused, they think that investors need a big amount to invest in a mutual fund, and those who don’t have a big amount cannot invest in mutual funds. Basically, as per myth, only rich can invest in mutual funds.

Well, this is not so, Mutual fund avails the facility of SIP (Systematic Investment Plan) investment, through which, investors can start investing in mutual funds, with a mere amount of Rs 500 monthly, quarterly or yearly. Basically, investors should start investing regularly in small amounts with consistency for the long term to build a big corpus.

Myth Number 3: Buying a home is better than renting. 

Owning a house of own is considered one of the biggest investments of one’s life, which gives the feeling of accomplishing a most important goal. However, buying a house doesn’t make sense, especially when you have just started on with your career. Sometimes, renting is far better than owning a house as it is cheaper, and one can concentrate on their job without thinking about maintaining a house and paying loan EMIs. In case you have a changing job or you frequently change the job or city you must opt for a rented house over buying one. 

Before planning to buy a house there are many financial factors like preparing an emergency fund, preparing your income to pay the EMI and more, that needs to be completed, after that you can move forward to buy a house.

Myth Number 4: Retirement is a goal that doesn’t need focus until the age of 40.

Planning for retirement is one of the essential elements of financial planning, but as people usually retire at the age of 60-65, they often consider retirement planning at the age of 40. However, people need to understand, that in their 40’s they have other big responsibilities, that are necessary to be looked upon, basically at this age, it becomes difficult to save or invest for your retirement.

Financial advisors advise that planning for retirement must be started as soon as an individual starts working. Individuals in their 20’s are free of big responsibilities like marriage, child, house expense and more, so this is the perfect time when people should start planning for their retirement, as this reduces your financial burden in your 40’s.

Myth Number 5: Don’t earn enough to save. 

Many of the youngsters stay away from investments and live a paycheck to paycheck lifestyle. They always have an excuse, “We don’t earn enough to save”, point is, they need to overcome this excuse, they need to have a change in their lifestyle, they need to create a budget for their expenses and apart from their expenses they need to save a part of their income and should start investing for goals.


Planning your expenses, and managing your finances, accordingly, has never been stress-free, but at the same time, it is important. We all are aware that, life is full of uncertainty and no one knows about tomorrow. There are chances you may die, but at the same time, there are chances that you may survive for the long term, and if you won’t be financially prepared, in that situation you can only regret it.

So, it is always better to be financially prepared for emergencies, for your goals, and the best way for preparation is an investment in a mutual fund. When investing, even if you die, your legacy will continue, and you will be able to help your kids with their lives.

As of now, you are aware of the myths related to financial planning. Sometimes, some of the myths may be real, but they are not true always. Prominently, it is you who must handle these myths, understand them accurately and then take the right decision, but never let these myths get over you and seize your financial freedom.

You can also contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).