Proper financial planning is critical as other things in life because future is uncertain. It’s always wise to balance your savings & expense habits. If you are looking to start your financial planning but don’t know where to start, here are a few tips to get started.
Managing your money shouldn’t feel like a burden. It can get overwhelming for some especially at the early stages. One needs to show discipline and commitment towards the plans they make. Saving should be your first step towards better money management. In case of cash urgency swiping your Credit Card isn’t the best of ideas as it is the one of the most expensive forms of debt. Start by creating small milestones of minimum savings you’d like to make each month on your earnings and then manage your expenses around it. This will be a stepping stone to develop discipline for a better financial future.
Maintaining a personal balance sheet could be the best way to know what you own & what you owe. It is a very powerful tool to manage your finance most effectively. A personal balance sheet is also the best way to jot down your assets & liabilities. Depending on how in-depth you want to go, it can be made simply on a spreadsheet or by using sophisticated tools.
How you spend your extra cash determines your financial future. If you don’t have a plan in place, you’re likely to indulge in overspending. The surplus cash could be used in a better way to make your financial independent. Proper financial planning can be an excellent way to channelize the surplus cash & counter inflation.
Lack of debt management can hinder your financial future significantly. To pay off older loans you may end up borrowing another loan. You’ll fall in a nasty debt trap if it gets out of control. Your important life goals may get overlooked. However, by dealing with your debt smartly will definitely help you stay away from such issues.
You mustn’t forget that your life & property is exposed to various risks. These risks can land you on a total loss of earning and put a break on your financial independence. Ideally, you should purchase a life cover for at least 10 times your annual earning. Besides life insurance, you also need to buy health insurance as it’ll assist you to access quality healthcare at a reasonable price.
Last but not least, to secure your financial future you can consider seeking help of a professional financial planner. Sunil Chugh is a Certified Financial Planner in Mississauga helping individuals, families, and businesses with Financial Planning, Estate Planning, Insurance Solutions, Education Planning, and Tax Planning and Preparation.