When Mr. A friend passed away leaving behind a setup and good wealth for his family. He realized how important it is to manage your finances well. Many of us have come across instances where due to improper management of finances families suffer. Managing your money is a very important task we must not overlook. Today younger generations have started earning at a very early age and they become independent. In this pattern of early earning and early independence, they miss the financial planning. They are generally not exposed to the need for planning their finances.
In later days when they come across some financial contingencies, they realize the lack of funds. The lifestyle today is less of saving for the future and more spending on the present. In the constant demand for spending on lifestyle, youngsters miss planning their financials. Just the ideology of planning is not enough. The strategy has to be well driven to ensure that your hard-earned money is ripping returns as you want to. The saving is worth the compromises you are making in leaving the present.
We at Pragati Funds understand every customer is different and they need different kinds of strategies to suit their financial requirements. But many times people want to manage their finances on their own. It is important to note a few strategies to manage your finances properly. Let us review these strategies.
1) Set your expectations
When you make any decision you need to be clear what are the outcomes you want. Hence, when you are making any financial planning you should set your expectations. When you are clear of what is expected future disappointments are taken care of.
2) Create a plan
Every action when you are making any investment needs proper planning. When you plan you understand the contribution you will be making and what is the outcome you are expecting. This helps you keep a check on the developments and understand if you are in the right direction.
3) Build a credit
Today the world has moved to virtual reality. What you cannot see does exist. In the same way, your credit is not tangible but building it is important. The existence of your credit plays a role in your financial planning. The amount of loan you want to take, the market credibility you have, etc requires your attention to build your wealth.
4) Don’t pimp your liabilities
Many people to build their wealth add a lot of liability in their financial side. It is important to take the risk when you want to grow; nothing grows in the comfort zone. Yet you need to be calculative of how much of liabilities you can bear or can manage in case of any contingencies. Based on the overall valuation add financial liabilities otherwise it will not increase your wealth, rather it will deteriorate your holding capacity.
5) Build contingency funds
When making any investments or going ahead with surplus financial planning keep in mind you need to keep asides contingency funds. Investments are not contingency funds they are your trees, which will grow to give you fruits. Contingency funds are your bread and butter which you will need any time of emergencies. One should keep at least 3-6 months living cost in surplus as contingency funds.
6) Right partner selection
We are very cautious when selecting any kind of partner. Yet we ignore the importance of the right financial partner. Your banker, investor or brokers are your financial partners. Make a thoughtful selection for them. Do not go through publicity and ad campaigns. Overview of their market credibility and performance in the market will give a righteous picture.
7) Ensure yourself
You are the biggest wealth of yourself and your family. Make sure you are secured enough to take care of you and your family’s future. In case of medical emergencies or deaths, your insurance is your best bet. Do not compromise on this financial planning. It will give the biggest support to you and your family. Be it a medical-claim or life insurance, it is a must.
We at Pragati Funds provide you valuable inputs to help you in decision making and executing your investment plans. You can reach us to get a more in-depth understanding and learn about how to make right and smart decisions to create your wealth.
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