Steps to create a successful financial plan
Knowing your financial position today Find out where you are financially right now, including your income, expenses, debts, savings, and assets. This is the first stage in financial planning since it helps you get a solid sense of how your finances are doing and where you can make improvements.
What are the various financial goals I want to accomplish in life, you could ask? They should be written down on paper. No goal is too tiny or too large, so don’t be afraid to lower it. Make sure your objectives are specific, though. Here are some examples of attainable objectives: “I want to buy an SUV costing Rs. 13 lakhs in the next 18 months” or “I want to buy an apartment worth Rs.80 lakhs.
Investors have a wide range of investment possibilities at their disposal. You have access to approximately 2,000 different plans on the mutual fund market alone. Investors might accomplish a variety of objectives through various investing options. Equity funds, for instance, are appropriate for long-term objectives like retirement planning, funding a child’s education, etc. You might wish to invest in debt mutual funds if you are risk averse and interested in a relatively constant income. Tax savings are possible with equity linked savings schemes (ELSS funds). Many financial experts have emphasised the significance of mutual funds when it comes to investing. You can realise your objectives and goals by making regular, long-term investments in these funds.
Implement the right plan You need to select the right investment option based on factors such as your goals, age, risk appetite, and investment amount. If you are unsure of the funds you need to select for your portfolio, you can avail of the services of a financial advisor. These are certified professionals who help investors make the right investment choices. They also help with other aspects like insurance, retirement planning, estate planning, and taxation.
The financial planning process does not end once you invest your money. You also need to monitor how the funds are performing regularly. If they don’t perform, you may need to replace them with better-performing funds. You also need to follow your plan because as you grow older, your goals and dreams evolve.