Financial planning covers aspects like savings, investment, expenditures, and so on. If you plan properly, then you can happily bear fruits that your savings can serve you during fiscal emergencies, or else, the next better solution would be for applying for an instant personal loan online. So, if you want to be a pro at money management, then you must know about the subject. Well, the main rule of planning is to be systematic about money management. If you are irresponsibly spending and are unable to yield the desired result, then you may land yourself in a debt trap.
Why Should One Do Financial Planning?
The first question that may cross your mind is, ‘When there are so many financial consultants, why should I do financial planning’? The answer is very simple! No one can manage your money and expenses better than you do! A financial consultant or an expert can only advise on the investment options or the returns that may yield, but they cannot help you in identifying your risks or emergencies.
The biggest supremacy of doing your financial planning is that you are responsible for your own money, as you have a better understanding of what you need and what you don’t need, with the income and resources available with you.
Steps to be Followed for DIY Financial Planning
If you are new to the topic of financial planning, then start by reading any topics related or gather some information from blogs, articles, or any videos which are available online.
Step 1: Become aware of your current financial situation
Understand your present financial situation and make a list of:
- Your fixed monthly expenses such as utility bills, rents, EMIs, insurance, school fees, diesel charges, etc.
- Your investments such as mutual funds, shares and stocks, fixed deposits, liquid funds, public provident funds, and any balance in your savings account.
- Your debts which may include the outstanding loans (home, personal, car, etc.), credit card debts, or any other form of debts that you owe and improve your credit rating.
- Any miscellaneous expenses such as movie tickets, dining out, trips, etc.
Step 2: Set financial goals
The first step of money management is to set goals and prioritize your needs. Saving money for retirement, buying any property or ornaments, for events like your child’s wedding or education, should be started at an appropriate time and age. So, having precise figures in your mind can help you to save huge without compromising on your future.
Step 3: Create a budget
It is not advisable to save what is left after spending. The smart way of saving is to save first and spend what is left after saving. Once you have set your financial goal, you need to prepare a realistic monthly budget to manage your money inflow and outflow every month. By doing so, you will gain confidence in how much you can invest annually and how financially balanced you are!
Step 4: Allocate the funds
Once you are ready with the budget, you will now know the amount at your disposal. So, once you have set your goals, the next step is to allocate your funds, such as paying off your debts, maintaining emergency funds equivalent to your 3 months salary, or planning for any short, mid or long term financial goals.
Step 5: Keep a track of your portfolio
Review your portfolio regularly to track the performance. This way, you can help yourself allocate funds to the necessary sources and also help you stay out of debt.
Financial management can be challenging, but with sheer determination and focus, you can quickly climb the ladder. Be willing to take challenges and learn out of your failures, as this process will be more fun and rewarding.
We hope that by following the steps as discussed above, you may not need any loan to balance your finances. But if, in case of emergency when your financial planning loses track, just apply for an instant personal loan online and get back on your feet. You can consider applying for a loan with Flex Salary, as they are one of the legitimate lenders who approve you with same-day loans up to INR 2,00,000 quickly.