Structuring your financial planning requires through analysis on present financial health to identify future requirements. Any planning without such perfect analysis, would fail and not be able to deliver desired results. Here are seven steps for those who plan their finance to get a fail proof status.
1. Identification of financial need and obligationsIdentifying financial needs and obligations totally depends on the status of person to person. It related to one’s present financial status, life style, family background etc. As an example, there will be huge difference between the financial planning required for a nuclear family with those who have more members in their family. Putting some effort will help one to identify all the financial obligations to lay his financial planning foundation stone in a better way.
2. Life insurance plan self
If you are the bread winner for your family, the first step requires by you is to protect your self first. Any incidents that able to threat your life, can give huge impact to the the life entire family members. Select a best term cover insurance with an assured sum of 6 to 9 times of your annual salary will do better for you to protect from such dangerous situations. Term cover required to pay relatively less premium for huge life cover.
Have a look Article: Insurance space for your family at a glance
3. Children education plan
Children are our important assets which carry our entire hopes. Parents are working hard to place their kids to a superior position in life. Planning for kids should have ultimate importance when planning your personal finance. Right planning to safeguard their professional as well as personal future required intelligent planning through safe but well secured investments. Here is an article specifically for child investments. It is simple but strong in nature.
Here is an article on the do and don’t when selecting ULIP products for kids: ULIP Selection – What you should know
4. Medical insurance for all eligible members in the home
Unexpected expenses can broke your financial rytham to a great extend. Illness to self or dependence are the top in such category. When planning your finanace, consideration on protection from such situations should have important role. To meet this, subscribing good medi-claim policies will help you by covering all eligible family members under one roof of a family floater to safe guard from illness related expenses. Remember to get a right policy with maximum illness protection riders and cheap in premium. If your parents are senior citizens, consider specific policies for senior citizens, to protect them.
5. Creating a second stream or source for income (invest or save)
Have a practice of creating and holding an emergency fund to a separate savings account for all the time. Before you move to plan for an emergency fund, remember to budget your monthly expenses first to identify how much money you required as an emergency fund. Generally, an amount equal to six times of your monthly budget will be considered as a good emergency fund. Creating an emergency find is one of the right solution to protect you and family from any from some dangerous situations like job lose or any immediate, unavoidable finance requirements.
Always update your skills and learn new skills to get protection from situations like job loses. Do with part time jobs to creat secondary income to support your family as well as create better savings for future.
6. Keeping focus on personal retirement plan
Learn from the squirrels. Squirrels generally collect their food in advance, focusing the winter season and will enjoy the same once after starting the winder. If you would like to enjoy your retirement life properly, should plan for such, well in advance. As little drops can form a sea, start saving with small amounts at the earliest to support your retirement life later. Never touch on any funds like employee pension funds or Provident Funds with a focus on your retirement time. Retirement focused long term investments are the best solutions for you to build enough money when you required later.
Have a look: How ULIP’s can make you rich
7. Consolidation of assets owned by the aging members of the family
Proper nomination should be there in place for all your investments and assets such as what you have in your hand and received from aged ones in the family. Proper consolidation always better to avoid possible legal problem in future. If you are the owner, be a right owner.
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