Is well structured financial plan is your dream? Are you stuck with any point to start financial planning or not aware where to start and what all are the necessary actions to go ahead? If your answer is “Yes” then this financial advice article for you. Here is a step by step information on the necessary areas where your focus required to have a personal financial planning..
Understand that financial planning is a set of strict rules one applying to life to achieve long term goals. Discipline is the major requirement to achieve the same. There are various personal financial planning software available but, that will do very little to to you. You can have a help of a personal financial planner, a financial adviser or take financial planning tools for reference but ultimately the success depends on you only.
It is better to read this article, keys to financial planning, before reading further. This is about the keys of financial planning including the budgeting, debt management etc that have major part in the personal financial planning.
1. Identification of financial need and obligations
The point where you would begin with your personal financial planning. Identifying financial needs and obligations are depends upon one’s status, life style, family background etc. There are lots of difference in financial planning from a nuclear family with a family where number of members are more. Little effort and study will enable one to properly identify the requirements to plan the financial safety.
2. Life insurance policies for self to protect family members from future financial problems
Protection for life, assets and health for self and dependents should get major consideration when moving with personal financial plan. If you are the only bread winner in family, then protect your self properly. Because, anything small or big, that happening to your life will affect till the other end of your family members. A term cover with 9 times of your annual salary will do better for you to protect your family from such possible financial burdens. Life insurance term cover available with cheap premium and large cover is a best option.
Have a look Article: Insurance space for your family at a glance
3. Children savings plan
Children are our main asset and each parents want to give them maximum they need in life to safe there future. A person run with a personal financial plan should have proper allocation that aim to his/her kid is a must requirements. Children should protected with child health insurance plans and should protect from there future financial requirements through proper investments made for them. A suitable financial planning instruments here are mix of ULIP’s and investment funds. Both can meet the future financial requirements through choosing the right investment mix.
4. Health insurance plans for all eligible members in the home
Remember, hospitality and health relates issues to you or family members break and crash your personal financial planning. You could protect yourself and family members to meet such incidents that can happen at any time, anywhere with anybody. Proper life insurance plan or health insurance plans are the best solutions to deal with such situations. Insurance cover with health/medical facilities are the your best friends and could not avoid this step. Remember to get one that have maximum protection riders and well managed. If your parents are aged, then separate health insurance policy for them is a best choice with enough riders.
5. Creating a second stream or source for income through build emergency fund
Have a habit of keeping an emergency fund in a separate savings account. A best plan is, keeping an emergency fund equal to your 6 moths salary will do better for you and will give necessary protection once if you could face a job lose or any immediate financial requirements. If you would like to invest an amount to use as emergency fund, then select one which has immediate liquidity option. A well performing money market mutual fund is a considerable option for you.
6. Keeping focus on personal retirement financial planning
Learn from a squirrel or ants. They are early collectors and collect food for the winter season and will enjoy the same once after starting the winter. Like this, to enjoy our retirement life properly, we should save from the beginning. Little drops can form a sea. Saving small amount from the beginning will give you a better corpus at the end. You should not touch 401k and/or Employee Provident Funds and keep this focused for retirement. Good long term investments in stock market along some best combination of mutual funds will be do better for you to meet the requirements.
7. Consolidation of assets owned by the aging members of the family
Proper nomination should take place to get better result from this section. A better arranged will, proper management of properties and other investments if aged personal will give you safety from any kind of incidents.
If you still have doubts, there are lots of resources that dealing with personal financial plan available in the Internet and the market. You can also get the help from Financial Advisers as well as the financial planning services firms in your city. you can find a financial planner by the use of Internet as well. You can use the freely available financial planning tools and model financial plans to learn more on the same. There are good financial planning guides available in the Internet to download and read to get more good awareness with the subject.
Visiting the websites of financial planning associations will be a best source to get quality information and materials to help your plan.