The joy of financial freedom can be nothing less than a nirvana for a person. However, it isn’t so easy to achieve this goal. It requires a well-organized approach and a strict discipline to accumulate the amount of money that you think is necessary to experience a complete freedom from financial woes.
Let’s see how a well-organized approach can work wonders for your money.
Keeps Budget in Check
Temptations can throw your budget out of the window. When you go shopping, you may just end up buying a fancy dress for your kid or a new pair of shoes on your whims or just because there is a big discount. But, when you are a committed financial planner, you ensure that you spend wisely and within your budget. Indulgence in moderation is good as long as you are on the right money track.
Increases and Grows Savings
A golden rule of savings is that you need to pay yourself first before you pay the shopkeeper. That is, save and invest before you spend. This doesn’t necessarily mean that you have to earn more or spend less to save more. What really matters is that you learn to save what you currently have and grow your savings. This will in turn create an additional income which can be further re-invested.
Pays for Key Milestones of Life
Ever wondered where will the money come from to meet the expenses pertaining to your life’s key milestones? An own house, child’s education & marriage, retirement and so forth. When you plan your money with discipline and well ahead in time, it will give periodic payouts as and when you touch these milestones.
Takes Care of Debts
No matter how much money you earn, save or invest, you may still need an extra sum to pay for some major expenditures of your life. You may take a home loan to build your dream house or an educational loan to fund your child’s higher studies. Availing loans is not an issue. However, the real problem when its time to repay the loan. Finances are stretched thin when the EMI is deducted and you may be forced to cuback some of your spending. However, a structured financial planning will ensure that you keep a tab on your liabilities and clear them without creating a dent in your future savings.
Creates Wealth
Wealth creation doesn’t happen overnight. It is built over time and is an ongoing process. It also requires a long term perspective. When you take a methodical approach to money, you know how and where you want to invest money to build a sizeable corpus during your earning years so that you can live comfortably after your retirement. It helps you to diversify your portfolio to balance the risk and returns, depending on your age, income, number of dependents and financial goals to invest in instruments. For instance, you can invest in wealth plans that offer a healthy and flexible mix of equity – debt funds, especially if you have a horizon of 12-15 years or more. When you are young, your risk – taking capability is higher and so you can opt for a higher equity percentage for better returns. As you near the retirement, you can switch this percentage to debt funds for secured returns.
Remember, it’s only you who has the control of your money. Whether you want to spend it imprudently or save and invest wisely is entirely your discretion. If you choose the latter option, then focus on adapting a well-organized approach and being a disciplined investor.
