FINANCIAL PLANNING
Planning |
Financial Planning is required by every business and
every family.
It is the foundation to keep debt at bay and to improve
your savings and investment strategy. The following are the steps for financial
planning:
- Budget: To
take control of your monthly cash flow. Calculate all your expenses
including your non-recurring and gifts along with festivals.
INCOME - EXPENSES=
0
If you have any surplus
that must be kept away for savings etc.
Track your expenses throughout
the month. Check your progress.
CREATE AN EXCEL SHEET GIVING IT THE
NAME BUDGET AND CHECK YOUR PROGRESS.
2. Pay off Debt: Follow a payment system that starts with the smallest and ends with
2. Pay off Debt: Follow a payment system that starts with the smallest and ends with
the largest amount of debt. This does not include your mortgage debt.
CREATE AN EXCEL SHEET CALLED DEBT PAYMENT AND
DIVIDE IT WITH DEBT, TOTAL PAYMENT AND MINIMUM PAYMENT = NEW PAYMENT IN PERCENTAGE. Adding
to it from any surplus amount left.
3. Build an
emergency fund: Have a Cash savings account to avoid further
credit card debt in
case of
emergencies. Save up for your holiday, festivals and any non-recurring
expenses.
4. Build Wealth: Invest
in S&P 500 Index 10% per year thereby, have an average 10% return.
It
will grow
overtime.
How to Invest in
various stocks, bonds or mutual funds. If you are a beginner go for
Mutual funds
as it involves less risk.
NEXT POST WILL BRIEFLY EXPLAIN EACH INVESTMENT
OPTIONS.
TIP: Download Monefy app to keep a track of your expenses.
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