We all work hard and earn so that we can have the fruits of the money saved. Saved money can be
Utilized for having a lavish lifestyle, for retired life, for future medical expenses, and for any of the other
Set of goals we have for our future. From the time we start earning, we all do have wish to have some
Savings and for this we wander for various investment options, but before we jump in the pool of
Investment we first need to understand our goals and accordingly plan our way towards it.
Let’s first understand the term “financial planning”, Financial Planning is the process that allows you to control your financial situation. Every individual, family, or household has certain
Financial position, and so any financial activity must also be carefully planned to meet specific needs and
goals. This process can be broken down into 6 steps as follows-
1.Analyze your financial condition –
The first step is to understand your current financial condition in regard to income, savings, expenses & debts. For this process you can also seek help of Financial planners, stock trading brokers, share trading brokers or mutual funds investment experts.
2.Understanding your goals-
The second step is making a list of your goals for which you are looking forward to investing. Getting the right broker or sub-broker by your side is really helpful when it comes to realizing or understanding your goals. Tying up your investments with goals is very important as it makes you know when and how much you would need the money.
3.Analyzing the gathered data-
The next step is to evaluate whether your current financial situation is good enough to reach your goals, or whether your goals are relevant enough per your financial conditions.
4.Developing the investment plan-
Depending on your goals and income, you can now decide where you want to invest. For this we at Profitmart, one of the best discount brokers in India will be happy to advise you to find the best suitable alternatives. There are many investment options like trading in the stock market, investing in mutual funds, going for tax-saving bonds, etc. what you need to be careful about is choosing the right option as per your income and risk-bearing capability.
5.Implementing the plan-
Once you are all set to invest get it going. Open your share trading account, invest in the selected choice of trading funds, mutual funds, or whatever your plan says, and wait to check for its performance. Once you implement the plan keep the thumb rule of impatience in mind and do not haste your way through switching between funds on every fluctuation in the share market conditions and make sure you do not get into the habit of taking too much follow up as too much of anything is bad.
6.Monitoring the plan-
Financial planning is not a one-time process, well you see that’s the reason it isn’t a financial plan but it’s financial planning! There are many changes in your day-to-day expenses or there might be an uncertain hike in expenses due to some ceremony at home, Marriage, children, or medical issues or there might be certain uncontrollable changes like changes in the taxation system, change in laws that might disrupt your financial planning and that is the reason you need to keep monitoring your plan and revise it if needed. once you get started with the process keep going through these steps to ensure you are on the right
Track in the investment game.
6 Steps to Financial Planning Process
