DOs and DONTs of Financial Planning

People usually feel that they are not making enough advancement towards their financial goals. There is a simple solution for that. Make a financial plan & stick to it. Here are some financial planning DOs and DONTs to get started:

Decide your need & set money goals accordingly:

 
Before making a financial plan, you should be clear about your goals. Put together a list of all the things that you presently use your cash on & all of those that you would like to spend your cash on. As soon as you have a clear goal it will be much easier to summarize the steps to enjoy a great financial future ahead.

Don’t put your wants before your needs:

Yes, you have the luxury to spend your hard-earned money on holiday & designer clothing, but at the same-time, you also need to be practical regarding what you wish vs. what you need. Ensure you have a balanced financial plan for this purpose. Categorize your wants & needs as per the order in which you value them. This will assist you in sufficiently assigning resources to each.

A good Credit Score:

Having a positive Credit Score lets you save cash on everything from your car insurance to the mortgage interest rate. Pay your bills on time & lower your debt to improve your score significantly. Know your creditworthiness. Try to identify the factors that could be lowering your Credit Score.

Don’t forget to track your expenditures:


Many people don’t know what they are spending & where. Shopping mindlessly & relying upon auto-pay for some bills can cause havoc on your savings. Without proper tracking of your expenditure, you can’t help yourself from over-spending. This is where expense-tracking apps can be handy as they are very useful in avoiding unwanted expenses.

Build an Emergency Fund:

An emergency fund can be a great help to keep your financial plan on track if a sudden expense such as medical debt or car repair emerges. Relying on your circumstance, your fund should have at least 3–9 months’ worth of expenditures.

Don’t spend exuberantly on housing:

Whether you are buying or renting a home, housing is perhaps one of the highest fixed costs in many people’s budgets. The lower you can spend on housing, the more cash you will have to spend & save.

Do live within your means:

Yes, it can feel uncomfortable to follow this practice, since you may have grown living a luxurious lifestyle. But once you start changing this habit, it will get easier, and your future will thank you for makings smart decision.

These tips are a great starting point. For more concrete advise and objective recommendation, consult a Financial Planner. Sunil Chugh is a Certified Financial Planner in Mississauga helping clients with their financial planning needs.
  
Also Read
"Top 5 Taxation Best Practices for SMBs"
"Factors to Consider When Selecting Your Next Financial Planner" 
"Tax Tips For SMBS" 

Disclaimer: The information in this commentary is for informational purposes only and not meant to be personalized investment advice. Please contact your investment professional for investment advice and before investing in any product. ACPI does not publish market research and Sunil Chugh is not registered as a research analyst. The content is from sources believed to be accurate and the opinions expressed are those of the author and do not necessarily represent those of ACPI

Source From: https://medium.com/@sunilchughfinacialplaner/dos-and-donts-of-financial-planning-92fbe6ff45e
Location: Mississauga, ON, Canada

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