Step-by-Step Guide to Financial Planning

What is Personal Financial Planning?

It’s the process of investing towards your goals in an organized manner while reviewing them regularly.

Step 1: Analyze Your Cashflows

  • Start by understanding your income, expenses, and liabilities.

  • Understand how much you can allocate for spending and saving. 

Step 2: Personal Finance Ratios

  • Learn key ratios like reserve surplus, debt-to-income, and savings-to-surplus.

  • Understand your financial health.

Step 3: Set Goals

  • Set long-term goals like retirement and your child's education.

  • Set clear target amounts and timelines.

  • Don't forget to consider inflation.

Step 4: Align Products

  • Don't make ad hoc investments.

  • Choose products according to your goals, risk tolerance, and timeline.

  • Tailor your plan according to your unique profile. 

Step 5: Review

  • Life evolves, and so should your financial plan.

  • Review your strategy when facing major life changes or shifts in goals, and make adjustments to stay on track.