Financial planning has always been a tough job to take on, especially when you are entirely new to Finances’ Industry. Another bitter truth is that despite going to every successful school or college, you will come across very few schools that help us learn Finances and Financial journey in a better half.
Assume your Financial journey as a plane, which lacks the flight path and the flight routes, will you be able to land it?
Planning the Finances and managing the Investments has never been an easy job. You need to know your long-term and short-term financial goals, along with keeping a keen eye on whether you should invest in this.
A Happy Financial journey has the following benefits:
➔ Better Credit Score.
➔ Better relationship with family members.
➔ More positivity around.
➔ Manageable stress levels.
We all might have gone through several ups and downs in terms of Money, and it will not be surprising to say that Money can give someone the biggest surprises. Investing Money or saving on your expenses are such ideas that can help you get a Financially stable future, but you also need a Risk-proof plan for investing in the right direction and platform.
Let’s talk about Starting your first financial journey without any error-prone area.
➔ List down your expenses and Income, also develop a detailed Spending plan for the same.
➔ Identify your asset and the Liabilities.
➔ Goal Setting
➔ Create a Saving Plan.
➔ Make a routine plan and check them annually.
➔ 1. Know your cash flow.
Briefly note all your expenses you did in the past year and the expenses you did in the last four months. After the list is prepared, you can just view them side by side and compare them in order to see your spending pattern. This will give you your exact spending pattern as well as helps to prepare a budget every month, for which you can prepare a monthly budget. If you spend more than your budget principal, then you will end with a bad credit score, credit card debt, and unwanted credit card debt.
➔ 2. Know your strong and weak points
After you know your spending limits, you now need to make a box with two sides, a left and a right side. The left side will have all the items of value, and on the right side, you need to enter those names or items for which you have, for example, mortgages, loans, car loans, etc. After listing all the things in both the parts of the list, now subtract both the sides and now you have your Net Income.
➔ 3. Goal Setting
Set 3 goals you would like to achieve in the coming times like in the coming three years you would like to buy a car, and then after five years, you would like to buy a home so you will have to save some each month to come up to that price of the house in 5 years. Short-term goals and long-term goals can be set for x years, where x is the number of years which depends upon your Income every month.
➔ 4. Savings is your best friend.
The key is not to always start big, instead of creating small and saving every month is the right way to achieve financial freedom. Do not just overdo it. Instead, take it slow because if you are overdoing it, eventually, you will take it as a hard way to save pennies, and you will end giving up.
With time, you will get more comfortable and eventually get your savings to grow. If you like to spend on items lavishly, then the correct way is to put all savings in an account you don’t have access to.
➔ 5. Keep your actions under the monitor and watch over your savings.
Keep your finances under direct monitoring. The more attention you will pay to your savings and expenses, the more control you will have over the cash outflow and inflow. Finances are much like your body physique. The more watch you keep on it, the better physique you will get. There are numerous tools available online that can help you achieve a lot of the above in rather a straightforward method. You can set reminders as to when your payment will come so that you can deposit it in your savings.
If someone lacks the value of “Assets and Liabilities” for whatsoever reason, having basic knowledge about primary education and finances is all that is needed.
Important takeaways:
● Each step above depends on the previous stage for specific reasons. You cannot jump to step 5 and then recursively move backward. To do proper investing, budgeting, and savings, you should be prepared for what these terms are related to.
● Money journeys can never be some easy points of life. These are primarily curved graphs because of the Investment market not staying stable enough. Your career opportunity will shift from one curve to another curve, including your family situation, to evolve as well.
● Never be your own boss until you are an expert in the field and aware of every steep point. Always get the suggestions of some Certified Financial Planner.
Conclusion
Money matters are not easy enough; they are always a jumbled up set of sentences with most of the investment plans. You just need to know what hold of the stacking cash you will need to fund your Financial Freedom at your retirement. As someone says,’ Money is the root of all evil,’ I think this is an incomplete statement. The correct statement should be,” Money can be the root of all evil if you do not manage it properly with time, taking care of the investments and savings.”
Ankita Kaushal is working as a blogger for Veronica Karas. Veronica Karas is a Certified Financial Planner in NY. She helps with Complex financial issues like stock options, estate planning, tax & financial planning and more. Get in touch with her now for any assistance regarding Financial planning.
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