How to Fool Proof Your Personal Financial Planning? Here are 7 Tips!

6 Min Read
Personal financial planning and strategic

Are you well equipped to deal with any unforeseen financial problems? If you hesitate to answer this question even for a few seconds, you need to review your personal financial planning. There are many examples of people failing to rebuild after a financial loss because of a lack of intelligent financial planning.

It’s not about how much money you have. It’s about how you plan to manage financial challenges in whatever limited funds you have. Read this post ahead to change your outlook on money forever.


7 Expert Financial Tips to Fool Proof your Financial Planning

Consider Your Individual Financial Condition

These tips are called personal financial tips for a reason. The first step toward financial planning is to discard all the generic advice and think according to your individual needs. Everyone’s financial condition is different, and you should plan according to your available resources. You can start by making a budget to know where you stand.

Also, list all your assets, liabilities, savings, and investments. This information provides a lot of clarity regarding your financial standing. You can also fix an achievable financial goal with the help of this data.

Invest in Profit-Making Avenues

There are investment options that guarantee profits in both the long and short terms. Recognise such avenues. For instance, equity funds and land acquisition provide fantastic ROI. You may need to find additional sources of income or sell one of your less profitable assets to buy or invest in a profit-generating commodity.

But looking at the kind of return generated through these kinds of investments, it’s worth it. This can be your protection against ever-increasing inflation.

Keep Enough Money in Savings Accounts

Emergencies such as hospitalisation and vehicle breakdown don’t send any notification before arriving. Thus it is advisable to build an emergency fund in your savings account, which you can withdraw instantly whenever you need.

And it’s wise to keep this money in a high-yield digital savings account. Nowadays, most of the zero balance digital savings account give more APY (Annual Percentage Yield) than a traditional bank account. They are easier to operate and function 24*7. It is also advisable to get health and life insurance plans.

Plan Finances for Retirement

The good news is that life expectancy has increased with the progress of science and technology. But you need money to spend this long life comfortably. And you need more money in old age for your treatment and health care.

Therefore planning finances for retirement has become more critical than it ever was! You should start now; the earlier you start, the richer you retire. Many companies launched their retirement plans looking at the demand. Take the one which guarantees good returns. Do thorough market research.

Choose a Side Hustle

In the 21st century, you can’t depend on a single income for your livelihood and savings. You must have multiple income sources if you want to make worthy investments, live a comfortable life, and bear all your emergency expenses without asking for a dime from someone else.

You can become an insurance agent or follow any of your passion, like writing or photography, on a freelance basis. And if time is your problem, invest in something which provides you with good monthly interest.

Make a Budget

A budget is something that provides you clarity regarding how demanding your lifestyle is. You can make 2 sections in your budget. One for the necessary expenses such as rent, electricity, grocery, etc. And the other for recreation such as dining out and movies.

Needless to say that the first section is sacrosanct. So when it comes to making room for more savings, you only need to cut a piece of the recreation budget. These are temporary adjustments for a better future, as your income will increase at some point.

Save on Taxes

Once your income increases, you will realise that a major chunk of it goes towards paying your taxes. If you invest and purchase wisely, you can legally reduce your taxable income to a significant extent. These investments and purchases are beneficial for your government. So you will be giving back to society without paying hefty taxes.

For instance, in India, savings under sections 80C and 80D, such as ULIPs, NPS, PPF, EPF, insurance premiums, etc., come under tax exemption. You can consult your C.A. for more options.
Yes, these 7 tips help you make a robust system that enables you to deal with any financial problem. However, your financial situation changes with every critical life event, such as a promotion, marriage, childbirth, house purchase, career shift, etc. Thus, don’t treat your financial plan as set in stone and review it repeatedly.

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Naina Rajgopalan has a thing for numbers & a deep fascination to learn about all things finance. She's been money-wise from a young age & has always shared her knowledge & tips with those around her. Being a part of the content team at Freo Save, a neobank that offers a 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking & fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.
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