4-step guide to creating the perfect financial plan

A sound financial plan is the key to financial independence. Here are a few ways to make the perfect financial plan

Financial security can only come from knowing how to develop a financial plan. Fortunately, effective financial planning is simple. You can learn financial management by following a few basic practices. 

Steps to follow if you want to have a stable financial future

Note these simple steps for a secure financial future:

Keep a record of your expenses

A budget, which explains where your money is going and coming from every month, is the primary step in sensible financial planning. Developing an effective financial management system does not have to be difficult. All you need to know is:

• Write your income and expenses in a notebook
• Create a budget template worksheet and keep it up to date.
• Find a budgeting programme that keeps track of your income and expenses.
• Keep a keen eye to see that you are depositing money into your savings account.

Continue tracking and planning for over one payment cycle to capture every expense. You'll be able to build better future financial plans if you figure out your present spending. Knowing how much you are spending allows you to save money more effectively.

Know your financial future

Once you have your present financial life under control with all the planning and tracking, start thinking about the future. Know what you want your financial life to look like. If you want to purchase a property in your future, start saving money. Barring property, if there are any other enormous expenses you can foresee in your future, you need to open different savings accounts for your different needs. There are different types of savings accounts you can choose from. You can look up IDFC FIRST Bank’s website for some of the best types of savings accounts. With interest rates of up to 5% per annum and free and unlimited ATM withdrawals, IDFC FIRST Bank savings account offers some of the best features in the market.

Understand the importance of savings

Focus on saving for a potential financial emergency, after you've established your personal financial planning objectives, and then for your longer-term goals. This means you'll have to go over your costs and income again, and then save money in one of two ways:

• Identify where you may be overspending. Do you spend a lot of money on recreation? What about vehicle payments, vacations, and groceries? It is necessary to look for methods to save money, but maintaining a healthy balance is just as essential. The idea isn't to eliminate all pleasant activities, but to limit your spending so that you can save some money.
• You might save more money if your income rises. This can be accomplished by requesting a raise, switching careers, starting a side business, or taking on a second job. Just ensure that any additional money you earn goes into a savings account.

Start building a portfolio

As you invest for your short-term savings plan, remember to account for retirement as well. It will be among your largest life expenditures and must be prioritised in your budget. The trick to investing is to do it steadily over time, whether you decrease spending or raise your income.

Investing in a senior citizens’ savings account ensures you are not stranded once your income stops. Another option could be mutual funds, which are easy to understand. You can invest in any mutual fund of your choice on IDFC FIRST Bank.

The key to financial planning is keeping your financial future in mind. IDFC FIRST Bank can help secure your financial future with a range of products. Visit the website to know more.

START SAVING TODAY! Open an IDFC FIRST Bank Savings Account now and get Monthly Interest Credits along with 1% CASHBACK on your LIFETIME FREE Debit Card.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.