Any investment or expense requires one to have capital with him/her. For a middle-class person in India, this can get increasingly tougher as the prices of various goods and services keep rising consistently. There is a need to therefore, plan your finances well since it will eventually be beneficial by helping you stay protected in times of uncertainty. Smart financial planning is based on the following tenets –


Set Up A Budget And Save

A critical step to improve your financial limits is having a focusedbudget plan that you put in place and practise. You can create a simple excel expense sheet and use it for keeping a track on your spending by merely listing where you are spending it. This simple technique will help you understand what part of your income is going where.

Once you are able to practise budgeting with the help of an excel sheet, you will realise that your income goes towards three expense categories: necessary expenses, luxury (entertainment etc) expenses, and uncertain expenses.. This helps you sort your money under different heads and keep a checkon your spends.

Plan Your Spending To Aim For Higher Savings

As a start, this principle enables one to spend on what is necessary and aim for higher savings, which will eventually result in higher financial gain. Planning the correct investment of your savings enables you to generate a larger corpus out of your own money. Any plan formulated to increase your savings will ensure a safety net from unforeseen financial disruptions. as a result of upheavals later in life.

This simple technique is mostly about saving and growing your hard-earned money so that you put it to its best use. Your main objective should be to maximise your savings, but you can also plan to use some part of your savings for entertainment as well, which may be classified as a luxury..

Safety Of Your Family

Whilst it is important to focus on investing your savings optimally and growing your assets, you also need to secure your life and that of your family members. A prudent way to achieve this is by taking adequate insurance, and also investing in relatively safer products when you start off.

Insurance policies even offer tax benefits, which is why financial planning schemes can be a great way to maximise the benefits of investment,by balancing security and growth.

Your financial planning ought to be based keeping in mind that you need to achieve the right balance between your immediate needs and future requirements for you and your family.