How Can I Learn Financial Planning Strategically?

Long-term wealth creation is a goal that everyone shares. While the ultimate goal might be the same, the financial goal and the way to achieve it will not be the same. Moreover, not a lot of Indians are not aware of how to achieve the goal. That’s where a financial plan can be very helpful. Simply put, a financial plan is a strategy that lists down how much of your monthly income is dedicated to day-to-day expenditures and how much should be kept aside for investment in schemes like FDs and mutual funds. It is very imperative to have a financial plan in place if you are serious about acquiring wealth through investments.

The act of investing is a very serious process and if done right, it could help you fetch wealth not just in the short-term, but also in the long-term future. It is imperative for you to first have a financial goal in your mind. After that, you need to analyse your financial condition, and after doing that, you need to decide on the sum you are dedicating for investment through SIP. And that’s not it, after starting your investment journey, you need to regularly check the results of your mutual fund’s investment and then act accordingly.

However, the question remains, how can one learn financial planning strategically? The different steps involved are:

  1. Analyse your financial situation:

Before going ahead and blindly formulating a financial plan, you need to first be aware of your financial situation. Analysing your financial situation involves performing actions such as assessing one’s current finances like income, savings, debts, regular expenses, and such. This step in financial planning exists to determine your requirements based on two things, i.e., your lifestyle and responsibilities. For this step, you can formulate a list of your current assets and debts. Doing so will help you get a better picture of your financial situation.

  • Setting a goal:

Every individual has a different set of short and long-term goals in life. The most common goals include things like buying a car, buying a property, and making travel plans for the future. The Thumb rule, it is important for you to make your financial goal quantifiable, and clear, and it should also be achieved within a specific timeframe. The purpose of this step is to both prioritise and separate your needs from your wants. Also, it is prudent to review your financial goals periodically. As your life continuously goes through several changes, it is wiser to modify goals from time to time.

  • Creating the financial plan:

After compiling the information required for the financial planning process, you can proceed to move on to the next step. This step involves formulating an action plan that can help you to fulfill the goals in a specific timeframe. For this, you need to re-evaluate the financial instruments that are suitable for your profile.

  • Reviewing your financial plan:

The process of financial planning is dynamic and requires frequent reviewing. When you reach the point of finalisation, there might be certain factors in your life that might have changed. Therefore, before implementing the financial plan, it is vital to analyse the benefits of the plan to make sure that it meets your demands appropriately. This step provides you with a fresh look at your decisions, which in turn can make a considerable difference.

  • Implementing the plan:

Once you have reviewed the financial plan, finally, you can go ahead and implement the decisions mentioned earlier. While it may sound simple, it can be the most difficult step. While it is understandable that you may start worrying about your expectations and the ability of the investments to fulfil them. But it is important to remember that you will be on the right track if you were to follow the basic rules of strategic financial planning.

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