We all make so many resolutions to ourselves “This Year, I will begin saving”, “This festive season I will begin to keep a budget” and so on. But few of us actually succeed. Many others either ignore or give up in the middle itself. Then the process repeats for those who didn’t start.
We have made it clear to you by giving you simple tips for financial planning. It is easy to understand and isn’t complex too.
Irrespective of whether you are a salaried person, business person, professional or a self-employed person, you are bound to have your own goals. The usual goals are emergency planning, retirement planning, education and wedding of children, house, and car purchase, etc.
Determine your current financial situation
This means identifying your income and expenses of each month and tracking down the same for a period of at least 6 months so that you get an idea of how much you spend and how much you can save and invest. Essentially called budgeting, this list includes every expense from the smallest of expenses to the largest of expenses such as weddings, functions, travels etc. If you8 are already investing, the budget must include details of that as well. Debt, equity, mutual funds, FD, insurances of various kinds like term insurance, travel insurance, health insurance, auto insurance, etc.
Control risk appetite
Every individual is unique and different. This is something we all have heard and continue to hear on a regular basis. Even here, every individual is indeed unique as he/she has different needs, goals, risk appetite, etc. Are you an aggressive, moderate or a conservative investor? Find out how much risk you can tolerate. Can you take more risks? When you are young, you can take more risks.
Being aware of something we loosely term as “goals” and talking about it isn’t effective. The value of goals is important and has to be taken into consideration. If your monthly expenses are 15000 Rupees today, you must have an idea of how much it might be 10 years, 15 years and 25 years later. Only then, we can find out how much we have to save.
Measuring your assets
Keep investments for specific goals such as one each for retirement planning, emergency fund, children education fund and so on. This has to be done before investing. This investment is for this purpose. Like this.
Keep an eye on your investments and battle risk
You have to account for unforeseen events too. Life insurance through a term plan is so essential today. Don’t underestimate anything. Purchase insurance of all kinds. Constantly monitor your plan.
Easy to understand, right? Follow this and make “practicing this” easy as well. For more information visit www.moneymindz.com or give a missed call to 022-62116588
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