Four Tips for Successful Financial Planning

1. Learn the art of Budgeting: its the simple act of tracking your income and expenses and then making smart decisions where to use your money. A book, An Excelsheet, your notes app in your mobile, anything can be used to do this. There is a popular 50/20/30 budget rule: The basic rule is to divide after-tax income, spending 50% on needs and 30% on wants while allocating 20% to savings.

2. Keep a close watch on Debt: with the rise in advertisement on the internet and the increasing dependency we 20s-30s year olds have on it, its easier to get swayed towards spending on our new found wants and desires. If it was a straight debit from our account that’s the most harm it could do. But today we have Amazon EMIs on appliances/ACs/TVs and its easy to fall in the debt trap. Controlling our impulsive spending is a must.

3. Don’t let your savings sit idle, invest them – There can be 100s of books written on why we need to invest our savings but the basic reason I think that our savings should go in Fixed deposits/ Mutual Funds/ Stocks/ Exchange Traded Funds is so that we don’t have easy access to them. Yes we will get returns in these investment Avenues but when our savings aren’t in our bank account we will think twice before breaking a Fixed Deposit or redeeming a Mutual Fund.

4. Set longterm targets for yourself : This  last tip is not something we have heard once. Many famous actors/investors/influencers/authors/writers all keep repeating this. Longterm targets/goals keep us hungry for a better and happy life. This last tip is not just for Money related goals but any goal that makes you an efficient and responsible human being. .