Are you really worried about managing your finance and save for your future? Do you need help on personal financial planning? Are you confused with the innumerous personal financial planners and tools available online and do not understand where and how to start? Here is the right article that can explain as to what has to be done, when and how for a perfect, relaxed and enjoyable future.
The first and foremost thing that you will have to understand is the fact that discipline is the most important aspect of personal financial planning. The technique involves the application of stringent rules for your finances in order to achieve your long term goals in life.
The top 7 strategies involve
1. Recognizing your saving needs and Understanding your current commitments
It’s important that you understand what you want to achieve with respect to your finances. Get to know how much do you want to save in the next 30 year time period? What would be your commitments in the next 30 years? And is there any current debt you are into? Understand your earnings and affordability before you proceed with personal financial planning.
2. Term Insurance Is critical
Check out if you have already insured your life. This is very important if in case you are the single earning member of your family. Term insurance is the type of insurance in which your premium is nominal and returns are almost zero. The security that you get via insurance is definitely required for your beloved family. Ensure that the insurance amount is at least 9 times your annual gross salary.
3. Savings for Your Kids
It’s very necessary to allocate funds for your kid’s education and for his/her marriage in the long run. So plan well in advance. Get a chart of how much you require and when for your kid. Based on the chart prepared, start investing such that you get returns right on time when you need it for the betterment of your kid.
4. Health Insurance For Your Family
With the skyrocketing medical costs, it has become necessary to opt for health insurance of all the eligible family members. An annual premium towards health insurance for your family members can easily save you from spending lump sum at the time of emergency hospitalization of your family members.
Yearly dental, vision and master health checkups can even be covered under such health insurances.
5. Mitigation for Emergencies
If you are amidst an emergency, it’s very critical that you should have a corpus which you can make use of. Eventualities are very common and planning well and mitigating the emergency is in your hands. If you or any one in your family confronts an emergency that necessitates you to spend a few hundred thousands instantly, you should be able to. For this purpose, allocate a separate corpus saving and invest a part of your income month to this corpus so that you can feel relaxed even if you confront emergencies.
6. Retirement Planning
Ensure that you should have a very high corpus amount after your retirement to continue having the same status and way of living throughout your life. Take the inflation into account and market conditions may go up or come down. Plan your retirement in advance. Don’t ever touch the provident funds that you have when you are employed. This could be precious during your post retirement period.
7. Asset Consolidation from Aged Family Members
Make it a point to understand the savings that your parents have done. The lie of anyone is uncertain. So understand where and how your parents have saved and make sure that you don’t allow them to run down the drain due to sheer lack of knowledge. Get to know what they have done with their hard earned money so that you can make use of the techniques and the money usefully and efficiently at a point when they are not able to by themselves.