Before welcoming the new year, take out some time to evaluate your financial planning for the past year.
This is not a huge task. If we want to shape our future, we need to understand our present. Similarly, current financial situation needs to be assessed for next financial planning.
Year ending is best time to understand financial status !
Understand your financial situation before the end of the last week of the current year and prepare financial plan of coming year.
About financial objectives -
- Ask yourself some important questions while reviewing your financial plan
1) Have you succeeded in achieving your financial goals?
2) If some of your goals are long-term, it will take some time to achieve them altogether. But have the steps and short-term financial goals been achieved?
3) Are credit card arrears paid on time?
4) Have you taken out new loans?
5) Has your investment portfolio been reviewed?
6) Are there any unnecessary expenses that can be avoided?
Golden Rules of Financial Planning
After answers to all these questions have been found... ask yourself... Has your financial planning been successful?
If the answer to this question is yes, then congratulations! You can do your next year's financial planning with double enthusiasm.
If the answer is no, don't despair... Find the causes of failure and find a solution; So that you can prepare your financial planning by considering all these mistakes while planning ahead.
If your previous year's financial planning has failed, divide it into four parts when planning a new one-
-Monthly
-Quarterly
-Half yearly
-Annual
This will not confuse you when planning. Also, if the financial planning of each part is successful, it can be checked at the end of the part and if it is not successful, the reasons can be found instantly and measures can be taken against them.
Consider the following points when planning the next financial year.
1. Symptoms of debt
Debt and debt repayment planning-
Eliminate debts that are detrimental to your financial health, that is, repay them as soon as possible.
If you have taken a loan from a family member or close friend, repay it first.
2. What is frugality?
Thrift is not stinginess.
You have full control over your earnings. When it comes to financial planning, don't calculate every dime just for savings and investment.
There are so many small in life, think of them too. Set aside a portion of your earnings for this dream.
This will not make your financial planning boring and you will accept it wholeheartedly, not as a cure.
3. Investment objectives and enthusiasm
Alternative income for savings and investments
Find an alternative income rather than sacrificing your little dreams for the fulfillment of your big dreams, debt repayment, investment, etc.
Also consider increasing income while reducing costs to increase savings.
4. Investment planning
Making a new investment every year or raising the existing investment limit provides long-term benefits. Therefore, it is important to give equal importance to investment while planning.
Check your investments, stop low return plans and replace with the best return investments in your portfolio.
5. What is latest formula of Saving ?
Change spending habits-
Often, we can increase our savings by changing our spending habits. E.g. Do you really need meals, expensive gym, branded clothes, shoes, accessories in an expensive hotel? If you ask yourself this question, the honest answer is no. So save these costs wherever possible.
Branded items are often cheaper when shopping online. So the option of shopping online can be considered rather than the mall. Of course, then make a decision by comparing the prices of the items you find online and outside.
Late payment charges can be deducted if all bills are paid on time. So discipline yourself by recognizing the importance of regularity.
Loans, insurance, credit cards, etc. Pay accordingly by keeping in mind the last dates of important things like installments, insurance renewal.
6. Financial planning and a sustainable livelihood
Digital payments and rising costs:-
Nowadays, due to the variety of digital payment options, shopping is easy even without money in the pocket. As a result, it has become difficult to control costs.
It is necessary to keep an account of digital transactions, to create its own set of rules, cost limits.
Do not increase the credit limit of the credit card. So again the cost may go up.
Don't buy unnecessary or expensive items by falling pray to offers like interest free EMI, double / triple cashback.
Financial planning doesn't have to be this way. You should review your financial planning every month.
* Be financially literate *
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