5 Golden Rules of Financial Planning in 2024

We are almost two months down the New Year, and some of our resolutions have already started to fade away from memory. However, not all is lost yet. There are still some changes that you can make to your financial planning for the coming 10 months, and make a mark for your future self. Wondering how to do so? Well, here are 5 Golden Rule of Financial Planning, laid down in the simplest and fairly implementable manner for you.

1. Involve Your Family Members

When it comes to financial planning, many breadwinners consider it as heir onus to provide for the family, and shy away from discussing the matters with their family, so much so that, even their spouse is largely unaware of the cash flow, savings, and investments. This is not appropriate and must be changed. To begin with, you can start by telling your better half, all that there is to know. If it seems like a mundane prospect, you can leave at least one part of the equation for them to handle, whether it is savings or investments.

As far as the children are concerned, a great way to get them involved is to make them responsible for their own expenses. You can set aside a fixed sum of money for them at the start of every month, and let them decide, when and where to spend it. Not only will this help them understand the value of each thing that they spend on, but will also assist them in comprehending what money they have. They will certainly enjoy the entitlement and get onus for saving or spending, taking their first step towards learning financial planning.

2. Keep a Track of Your Spending

We all have a vague estimate of how much we spend in a month. While we do know the amount of money spent, we almost never have a clear idea of where it is being spent. Besides, this leaves us no space to count major spendings such as those on festivities, appliances, mobile phones, and vehicles. It is for this reason that you should make it a habit to track your expenses. Not only will this help you take into account your regular as well as variable expenses, but will also help you identify unwanted spending patterns. This, in turn, will help you curb futile expenses and help in saving more while teaching you to spend mindfully.

3. Consolidate Your Savings

In a vast majority of cases, people spread their savings in numerous bank accounts, shares, bonds, mutual funds, and insurance policies. While this diversification may prove to be beneficial in the long run, it can sometimes become a hurdle in the efficient management of the funds. For instance, you may have 3 Savings Accounts, 1 Current Account, 1 Fixed Deposit Account, and a Post Office account. In this case, what you can do is at least merge all the Savings Account and the Post Office account into one. Not only will it ensure better management of your financials, but will also help you earn greater returns in the form of interest.

Yet another benefit of consolidating your savings is that if something happens to you, it will become much easier for your family members to identify the savings and claim them as and when required.

4. Closely Analyse Your Loans

Considering you are well into your adult life, we can assume that you have at least one or more loans under your name. If so, and your loans are older than a few years, then it could pay you off to analyse their interest rates and terms carefully. With the changing times, new loan offers have become more beneficial and transparent for the consumers, especially when it comes to big-ticket loans such as Home Loans. Hence, chances are that you can get a better deal simply by opting for facilities like Home Loan Balance Transfer. Of course, you may have to take the tax benefits as well as the processing fee into consideration before making a final call.

5. Create a Will

We understand that even talking about the possibility of someone passing away is considered as a huge taboo in our country, and hinders numerous people from taking the requisite steps for Financial Planning in India. However, for the good of your family, it is exceedingly important that you create a will, that too, at the earliest possible. If you already have it in place, make sure you update the same from time to time. And while you are at it, make sure that all your savings, as well as investment accounts, have a nominee, who must receive the benefits, should something happens to you. 

Yes, it will cause some discomfort to begin with, but in case of an eventuality, it will help your family stay afloat without any disputes and discriminations. 

We hope that these simple yet extremely efficient ways of financial planning will prove to be a turning point in your journey of life. The key here is to make things more convenient for yourself, while also keeping your near and dear ones in the loop.