Sarah, a young, well-educated and an earning woman, had recently begun to deal with her finances on her own. But, it was getting over her nerves as she was unsure if she was doing the right things with her money. She knew that she is not super-educated at finances and wanted an expert guidance. It was then that she approached an online advisory on personal finance, which helped her not just plan current finances but guided with long-term investment strategies to secure financial future.
Here is the basic guide to financial planning that she followed as a beginner. These basic tips help every beginner who wishes to have a financial plan in place.
- Do not hesitate to get started. The first thing to do is to simply start. Do not worry about the quality of the decisions you make. It is Ok even if you make a couple of mistakes. But be alert and quick at recovering. It’s better to start with something than to sit doing nothing. Eventually, you will find the best choices that maximize savings and returns.
- Begin with what you have. Time is one-thing that you can never buy back. So, do not wait until you get a higher paycheck or save up in bulk. Start with the little money you have in hand. Given the power of compounding and time, your little savings or investments would help accumulate unbelievably larger corpus over the time. For instance, an SIP (systematic investment planning) of INR 3,000 per month for 30 years would help you accumulate 1.1 crore rupees, considering 12% rate of returns.
- Draw your route to reach your destination. Determine your destination and proceed towards it with a plan. Figure out what you want to be and where you want to reach in next 5 or 10 years so that your focus do not shift away from the target and you do not deviate towards uncommitted or unnecessary expenses.
- Identify and prioritize your financial goals. Succeed in life by planning well-ahead, for all your financial needs. Jot down all your future money goals and prioritize them. Also, categorize all your financial goals as short-term goals, medium-term goals, or long-term goals. Calculate future costs to achieve every money goal and plan separately.
- Create a budget and move accordingly. It is highly important to stick to a budget to avoid overspending. Simply saving may not help in reaching all the goals. It is imperative to make wise investment choices to let your savings grow with time to beat inflation.
In conclusion, it may be confusing or tough when making a financial plan for the first time. But, it is imperative to take the first steps with dare and devotion. Starting with a little would help you big time in the long run.
For more expert, personal-finance advice, get associated with ArthaYantra. This online fiduciary was established with a motto to bring quality financial advice affordable and available to every household for securing his or her future. Get the right advice at the right time and do the right things with your hard-earned money!
