In life, risk comes from in any direction and forms like the pandemic which made our world locked last year. No one was ready for facing the pandemic lockdown. What it teaches us. We need to be prepared for any uncertainties in the upcoming. We should be ready in all attributes like mental health, physical health, and financial health. But if you want to be physically and mentally healthy, you need time to practice it. We all are trading time for money. Money grows with time if you plan your spending in the right way. The below 5 ways will guide you to have the best financial planning for your retirement life.
What did you mean by the right way?
If you earn and spend the money it will depreciate over time.
We need to diligently plan our finances personally and professionally.
In an organization, experts are working towards keeping the finances running continuously with better planning for crisis management. Everyone should have their financial planning to be ready for any crisis or uncertainties for their future. Do not think financial planning has to be done only for crisis management. We need to do financial planning throughout our life at every phase of our life.
Certain things need to understand to do a financial planning
Awake & Aware
We do work hard and think that our earnings will grow exponentially over the years so we live in a comfort zone. we are unaware, anything can come and hit us hard who knows. Your organization can go broke, you may not get a pay increase what you expect, a disaster or pandemic, and uncertain health situations can occur. I’m not cursing you that these should occur. These are all possibilities .7 years before it happened to me when my organization was gone broke in market competition.
I was not A-W-A-R-E of my financial situation when my organization went broke. I was so upset, depressed, frustrated, and frightened. I spent 48 hours understanding my financial situation like how much I have as debt, investments, liquidity, precise metals, and emergency funds. I had only one attribute in my kitty that was debt, nothing else.
That day my investment was Zero. Only I had a LIC policy that was not giving enough returns for long-term requirements. That day, I understood not having financial planning for myself and my family’s future requirements and desires.
I would request you to sit back and check what you are doing for the future. Do not fall into the cinematically fancy word of living the present moment. I agree you should live your life at present, not worrying about the future if you better understand your goals and have better financial planning for your retirement to have a fascinating life story to express.
Assessing and adjusting your financial status quo:
Once you are aware of your financial situation, you will start thinking to change the situation for the better. Assess your kitties carefully like debt, savings, investments, insurances, emergency funds, retirement funds, etc. Always intercept the cost with your time like how much time do you need to clear the debts, accumulate emergency funds, savings, etc. So you can understand how much time we need to spend.
Most of us underestimate the power of time. We thought that we are having more time than others. But never know how much time balance for us in our life that’s the beauty of life. That’s why entrepreneurs are pushing and working hard more than 18 hours a day in their start-up days because they know the power of compounding.
For simple understanding:
If you want to accumulate 5 Lakhs with your 50K salary, will see how much time you required if you save 10% of your salary every month.
10% of your 50000 monthly salaries is Rs.5000, if you plan to accumulate 5, 00,000 then
500000 divided by 5000
monthly 100 pay-checks you required.
100 /12 (months per year)
Yes, you required 8years and 3 months from your lifetime.
Now keep time in your mind and assess your current financial situation and what you need in the future to have better financial planning for your retirement life.
Frame goal-based financial planning to manage your financial needs.
Good times and bad times:
There are no good times or bad times to start. The thing is you need to START that’s what most of us stuck for any ideas we think to start, any plans we discuss, new good habits we try to develop. Some don’t know where to start, how to start.
Worries never bring results, you start where ever you are now and however, you want to start. All the successful people had this dilemma when they start new.
Don’t wait for a good time to start .start when you start thinking.
Less spending can accumulate more savings
If I advise you to spend less will you do it? Maybe or not, I don’t know. I won’t ask you to spend less, but save first then you start spending. This sounds easy?
Indian middle-class families teaching and preaching to save something for your future after spending.
But they have only a small ounce to save after all their spending.
After seeing the value they feel shame on the value and spent the ounce. But we have forgotten the golden saying “Small drops will make an Ocean”.
Don’t think only drop you have started saving, start saving then start spending that will be your first step to becoming the best financial planner for yourself.
Track your expenses every day then populate in excel which is an easy way to do simple math. You will get different data like spending for needs, wants, wish. You will be surprised.
If you are surprised then write to me -firstname.lastname@example.org in what and why you are surprised with the data.
For a free basic excel, course click here
One of the biggest chunks of money we are spending on our taxes, it is the responsibility of every citizen of the nation to have better taxable investment. For better taxable slab understanding refer here to Varunbhardwaj.com which will guide you for tax savings.
Investing and compounding magic
Once started savings don’t forget to invest because your savings in the account will get depreciated over time. Our goal is to save money to get an appreciation of our money. How can your money get appreciated over time, by diligent investing?
You need to invest your money in appreciating assets. There are different types of assets available for investment. In this digital age, one of the best assets to invest in is a digital asset. If you want to create digital assets then click here DigitalDeepak.com to learn more.
Investing and compounding over time is one of the main attributes of a fascinating retirement plan.
Note: For your term insurance needs please do click here theinvestmentbasics.com.
Want to become rich then read the book summary “Richest Man in Babylon” in Hindi, nicely summarised by my pal Deepak Singh
This article is written to spark an awareness of your personal finance, Based on the awareness you can assess and take action.
Comment for any feedbacks and mail to me for any suggestions and improvements.