Do’s of money management to keep objectives on track and emergencies at bay

A step-by-step approach called financial planning or financial management enables people or organisations to accomplish their objectives and efficiently manage crises. It assists in keeping track of income, expenses, savings, and investments in order to make one’s finances run smoothly.

A comprehensive strategy to managing your finances in the now and the future is financial planning. It serves as a guide, assisting in the achievement of objectives and maintaining readiness for monetary emergencies. A disciplined investment regimen can help you achieve all of your goals, whether they are for your first home, your children’s education, or your post-retirement corpus.

” Risk management has to be the initial step in the investing process. Three factors go into risk management: life insurance, health insurance, and setting up an emergency fund “Hemant Rustagi, CEO of Wiseinvest, outlined the Dos in his statement.

According to Rustagi, the main objective of investing is to realise one’s personal and familial goals.

How to Manage Your Money

  1. Life insurance: Although a person sets plans for his family’s welfare, life is unpredictable, and if that person were to pass away, it would be hard to realise those aims and desires. Rustagi claims that at this point, life insurance begins to assist by offering financial assistance.
  2. Insurance for health “A person’s budget for the next year or two will be completely wiped out if they stay in the hospital for five days due to how pricey our way of life has become. As a result, obtaining health insurance is necessary to cover your medical costs “Rustagi stated.
  3. Emergency Fund: Acc ording to experts, if someone doesn’t have an emergency fund, he or she may frequently disrupt their investing portfolio.

Having the correct product is equally crucial, according to Rustagi. When it comes to insurance, Rustagi advised getting a term plan for life insurance and a family floater for health insurance if you have a small family. You should also invest in a liquid fund to build up an emergency fund and keep it in pure liquid form.

He advised following a goal-based investment approach at all times, whether it be short-, medium-, or long-term.

  1. Asset Administration: “Asset allocation is the most critical part of financial management.” Consider the following justifications for investing in equity: paying for children’s education and retirement planning. The money must be used to purchase safer automobiles if the purpose is short-term, such as a vacation or college expenses. Debt and stock investments can be made for the medium term “said Rustagi.
  2. Save First, Spend Later: The financial advisor cautioned against spending cash for items up front. “Spending should not come before saving. People should set aside money from their first paychecks for that purpose and be committed to their financial goals “he stated.
  3. Start your investments young, the expert advises, because it’s easier to take a chance while you’re young. “When you’re young, you can afford to make mistakes because time is on your side. Long-term inflation can be outperformed by stock investments and taking calculated risks. One major benefit of investing in shares of stock is the power of compounding “said Rustagi.