The popular saying from Milton Friedman, “There's no such thing as a free lunch,” stresses on the need to plan our finances, so that we can fulfil our financial goals.
World Financial Planning Day is observed on the first Wednesday in October every year, to promote awareness regarding the significance of financial planning.
Everything surrounding you involves a financial outlook, from shopping your essentials, contemplating a purchase of the latest smartphone, scheduling your holiday itinerary, or even going debt-free.
Recently hit with a pandemic, the world is clouded with uncertainty, wherein chalking out a strategy to manage your finances, has gained paramount importance.
A financial plan helps you keep emotions at bay, preventing snap judgements that may influence your budget otherwise.
Growing curiosity over personal finance management has also triggered the democratization of learning investment techniques to explore global markets.
It must be noted however, that patience and discipline are virtues which assist your journey in achieving the financial goals you have visualized.
Here are a few pointers to take note of while you draft a financial plan this World Financial Planning Day:
: Budgeting helps you stay accountable, avoid bad spending decisions, and provides visibility on your status regarding your pre-set financial goals. Timely review of your financial records keeps you disciplined.
: Money borrowed to acquire assets that appreciate help you in clearing the interest payments. However, in case, the underlying assets depreciate, it may hurt your finances. So, it is best to avoid toxic debts by being watchful of your investments and having a meticulous debt management plan (DMP) at your rescue.
: COVID-19 crisis makes an emergency fund a must have in a financial plan. As a rule of thumb, you must consider keeping aside at least 3-6 months' worth of your expenses, in case of financial emergencies.
: Simply put, the sooner you start working on retirement fund, the more the benefit you receive of compound interest. It helps you lead a financially independent life post retirement.
: Make sure you do not put all the eggs in one basket. Branching out investment capital across equity, ETFs, bonds, commodity, crypto, and real estate markets, helps you cushion your portfolio. You can gain knowledge through our tailormade webinars and investment insights section to know more.