A) Understanding financial planning
Financial planning can be defined as a systematic way of efficiently leveraging our finances on the basis of our income. Financial planning has emerged to be one of the most skills one must possess for a well maintained lifestyle. Nowadays,with the advancement of technology and large scale penetration of information via books and internet we see new avenues of financial planning for individuals opening up.
One thing one should remember about financial planning is that it's a dynamic concept and set of rules change considering various factors like changes in taxation,rate of inflation, unforeseen financial expenses etc. Financial planning has emerged to be one of the most important skills which various management schools try to teach students of management.
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Financial planning like any other dynamic and pervasive plan is required at all levels, be it at individual level (personal financial planning) or at organizational level ( in business firms and companies) . So as to keep up with the change in learning new skills in financial planning students can visit finance assignment help sites www.greatassignmenthelper.com and acquire the requisite skills.
Financial Planning tips for beginners
● Create a proper budget- First step towards making any change in your financial structuring as an individual is to know about your expenses with comparison to your income. Divide your expenses into three categories a) essentials(which include consumer items of daily use) b) luxury( these include items which are purchased for entertainment and luxury like a fancy dinner, movie ticket, ott subscription etc) c) and try to cut off unnecessary expenses from it. Remember , all the expenses should be recorded.
● Weed Out Unnecessary Expenses - Now that you have records of your recurring expenses, try to identify expenses which can be avoided by you which makes no effect to your decent standard of living, these types of expenses should be stopped immediately .
● Set Out Detailed goals - In order to have a good hold on your finances ,you should pave a proper financial roadmaps which should have a fixed goal for eg- goal of saving at least 10% of your annual income or investing 20% of income with the goal of achieving at least 20 percent returns.
● Adopt debt management strategy - Create your personal debt management strategies by referring to various finance related books, podcasts and online platforms that are do my finance assignment platforms , start to implement your self made strategy.
● Do not get trapped by consumerism - Whenever we watch an interview of self made billionaires or successful investors of finances we find one thing common in all of them is that they discourage people to get trapped in cycle of consumerism ie buying things unnecessarily just to boost their morale or ego ,once you start earning a fixed income consumerism should be avoided
● Evaluate your creditworthiness - One should very clearly know their credit worthiness which is the ability to draw credit and timely repayment of it . calculate your credit worthiness and try to increase it.
● Diversify your investment portfolio- As per your income, you should invest in both the platforms which give returns on short term investments like NFTS, SIPs , Stocks etc and other long term investments like buying jewelry, land ,flat etc and renting it out.
● Spending rule- Most of the experts in finance have suggested that while buying anything luxury or fixed assets, 10% rule should be applied i.e if you want to buy a car or house its value should not be more than 10% of your annual income others you won't be able to maintain that property in long run. This strategy can be applied to rationalize spending.
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