Financial planning might seem like a tough task with inflation on the rise and salaries being barely adequate. Gone are the days when savings meant pinching pennies from parents and clubbing them in a piggy bank. We might have come way past our adolescent years but our dreams are still young. We still look at that car with fancy and still hope to go to that exquisite resort for a long holiday. But sometimes money or rather lack of it, holds us back. Why should money come in way of life’s joys? What if, somehow we always had enough. Here is a simple 5 step guide to financial freedom.
Financial Planning Begins With Review
Look back and review your spending habits. Create a list of things you love to spend on. Strike away anything that you can do without or exchange it for something that brings more value for your money. Understand your income and compare it to your expenses. Now, prioritize and recreate a list, with things that you would want to spend for.
Your priorities are set now. Create a monthly budget focusing on your list of priorities. Don’t forget to add a little space for fun. Reward yourself with a lavish dinner or go shop for a new addition to your wardrobe. Make rewards a part of your budget.
Learn to say ‘no’ to overindulgence. Don’t impulse buy, remind yourself of the budget you created to be followed. Tell yourself you are done with the reward for this month and the new trouser can probably wait till next month. Plan that outing a little later, if this month’s budget is reached.
Pay out all your debts one by one. It might sound harsh, but it is better to start clearing debts before you start to save. Debt kills savings. Besides, rewards wouldn’t be as much fun if you had debts pulling you down to the ground. Quit that urge to use the credit card every time you fall short of cash.
Insurance is a great investment. Buy a life insurance, medical cover or accidental insurance. It will keep your savings and emergency funds intact. Just like a trusted partner, you will have something to fall back on in times of need. You wouldn’t have to give up on your rewards either, in case an emergency arises.
You could go on that lovely trip,
And pick up all the exquisite things.
You could drive the car you like,
Be a master to your own life.
Do the things you always enjoy,
Financial planning will just get you by.
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