1.Save before spending- Spenders are those who give priority to spending. Savers give priority to saving. Then they spend accordingly.
2.Create an emergency fund- It is very important to keep some money aside for emergencies. This money comes in handy in case of sudden emergencies. Emergency funds help you deal with unforeseen events. You can keep money for emergencies in a savings bank account or fixed deposits or liquid mutual funds.
3. Buy a term insurance policy- Your life insurance cover should be 5 times your salary. The policy amount should be able to meet your liabilities. In case of any untoward incident, it should meet the needs of your dependents.
4. Buy a health insurance policy- "Health insurance helps in the treatment of life-threatening diseases. It is important to deal with the rising medical costs. If you accidentally get any disease, then the entire savings get wiped out.
5. Invest based on goals- Keep a goal-based approach in investing. Define goals according to different periods. Then, to achieve these goals, you should invest accordingly.
6. Review of existing investments- It is also important to keep an eye on your investments. It should be reviewed from time to time.
7. Make a will- The last but important point in financial planning is that every investor should make a will. In this, the nominee and the holding pattern should be taken care of. This makes it easy for your heirs to get your assets.
8. Retirement Planning – Allocating your savings for retirement purposes. The basic aim of retirement planning is to achieve financial independence.
The basic objective of retirement planning is to achieve financial independence. Most people think of retirement planning only after the age of 50-55 but then achieving their retirement goals becomes a challenging task.
To overcome this, we need to start retirement planning early. It would be better if we start investing a little bit as soon as we start earning money. The advantage of this will be that we will be able to easily achieve our retirement goals by saving a little bit every month.
Conclusion – Once you know the features and types of financial planning, there are various things you can think about depending on your stage of life.
For example, if you are a young working professional and do not have family responsibilities, you may only need term insurance and health insurance.
If you are in your 30year, you may need assets that help you achieve multiple goals at once and give you suitable returns. Whatever your goals are, you can get more clarity on how to achieve them with the help of a financial advisor.