As we aware, financial planning is a magic word but most of the people who know the term ‘financial planning’ are not well aware about were they would start or how they start. Without proper knowledge on what exactly financial planning, contacting a financial planner will not deliver the required result. This article intends to enlighten the term “financial planning” and guidance to a strong basement that required starting your own financial plan. It is also helping to take a self check to identify the mistakes that you might have committed when started the financial planning.
Financial plan is nothing but plan your money and yourself in a structured way to overcome all burdens at present and future. Of course it involve money but in a well defined manner. One can start financial planning for life himself by following the below steps as a startup line:
1. Personal Budgeting – Budgeting has a major role in financial planning as a beginner. Through proper budgeting, one can easily identify the exact money requirement for a particular period to meet expenses properly. To do the budgeting properly, one should identify his must have requirements in each month and should be well versed with need and wants. Preparing a list at the beginning of each month will be a good idea to plan the budget as fail proof.
2. Spending plans - Disciplined spending is nothing but remembering you to spend less than what you are earning. This point directly connected to the above one. Any action that involve money without proper budgeting will put you in trouble because of not getting the proper idea about what and where you want to spend your money. Some simple ideas to save money is, never take bulk amount from your account. Never keep more money with you when you are free and out for shopping. Have a good control on credit card. Credit card is the major to lead you to spend more. If you are not a person having any control on credit card, better you should close your credit card or do not keep the same with your wallet. You can keep the same for emergencies. Credit card is the major culprit to put people in debt burden because of not having control on the use.
3. Pay off debt first – Debt is always against financial planning. Debt can destroy all your plans because of the compounding power. The best and very first idea you could take action to pay off all your debts. With huge debt, remember, no achieved the financial planning goal. So take this as your very and very first preference. Any loans i.e. home, car, education, all are debts and need to be pay off first. As I said in the point above, credit card is the major villain in this section to…
4. Invest money for future – Invest as much as you can for your better future. Investing money while in collage is one of the best practices in my opinion. Ask the question how much money do I need to start investing? Plan your budgeting and spending as per that. Always try to have surplus amount for your investment purpose. You don’t required to have bulk money to start investing. That is just a myth. You can start with very small amount. The only requirement is, identifying the instruments and portfolio as per your age, risk profile and financial capacity. A good and certified financial planner will be your best friend in this. You can also find lots of useful articles in this blog on financial planning, portfolio and helping beginners to start investing.
Early investing will always give you comfort at the end of your earning life. This will help you walk proudly by raising your head. Earn today and spend today is good for only to say. It is not at all a practical approach. Remember, nowadays, relations are just for a time pass and no one going to take care of you if you don’t have money in hand. Be wise and act wisely. If you want to make your life comfort later, start invest wisely.. Remember, little drops can form a sea. You can start investing with small amount using many available systematic investment plans.
Have a better financial plan to brighten your future as well as your family…. Best wishes to all or you….
Don’t forget to comment and inform if you feel that I have missed any major points on this article….
Email Article
Send this article by email
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
