Financial planning is saving the money for the future. Financial planning includes all the below questions.
- How much finance is needed for a house or company?
- What are the sources of income?
- How it will be utilized by house or company?
This plan allocates some savings for short term and for the long term. Financial planning covers the topics of budget, planning, savings and insurance. Here is the brief discussion about the topics.
Budget: Budget making will help you to know your financial status. By making a list of expenses will tell you how much you can save. Check out from the list, if there are any possibilities of cutting out any expenses. Thus budgeting will provide you the information about your saving amount.
Planning: Plan your future and start saving money. Plan out your requirements and events for a much secured financial future.
Here are some requirements
- Planning for a wedding
- For the arrival of newborn baby
- For child’s education
- Buying a house or land
- Medical purpose,
- Survival after retirement
Based on your needs, you can determine, whether you need a bulk amount or you can start savings small for your biggest needs in future.
Savings: Budget shows that, how much money you can invest or how much money you can save. Diversify your savings. You can invest one third of the amount in share market. This is riskier. But it can give high returns in short time. Invest in debt funds, fixed income bonds, since it is safe. In a certain period of time, you will get a certain percentage of interest. Another option is, save in small amounts in your bank account or in your piggy bank. Liquid cash will always help you in an emergency. Most important saving is for your retirement. This gets the highest priority.
Insurance: You should be properly insured to avoid financial shortfalls in the event of an accident or medical emergency. Insurance is must for everyone and every asset.
Make a time and do financial planning. This planning will help you to achieve your goals and for your future needs.