Everyone wants to get wealthy. Don’t we? Or, let’s say financial independence is what we seek for. Getting financially stronger not only helps in livelihood, it’s also a want of today’s era to have a satisfied life. Money is never enough for an individual. More your income is, the more your needs get. It’s human nature.
Money is something that is never a constant. Today you have a handful of money tomorrow you may not. It comes and goes! To be consistent you must have financial Planning. That is
- Budgeting:- Simply, it’s a process of planning future saving and spending. We must have a certain plan like tracking our spending by Noting down our expenses which helps to decide when, where and how we will spend our money each month. A proper budget helps us to have enough money each day.Budgeting is key for managing finances.
- Saving:- Income – expenditure = Saving. The difference between income and expenditure is Saving. Level of income determines the ability to save. The higher the level of Income, the higher will be the amount of saving and vice-versa. Minimum 25% of your income should be saved. In order to get proper Saving we have got financial institutions with various facilities like deposit accounts with interest rates. Saving plays a vital role to build wealth and have financial stability.
- Investment:- It’s a part of income, which is devoted to the purchase of those goods to attain appreciation over a period of time. We should invest our income in buying old shares, bonds or property because it not only increases the value and builds wealth it also ensures us financial security for both present and future.
- Invest in yourself:- We talked about having proper financial Planning to accomplish our financial goals. But, what about sources of income? As everything is so diversified to fit in one position, an individual should have a variegated set of skills. Changing era demands skilled manpower and now we should aim for growth by enhancing our skills. It’s a Necessity of the world.Go for skilled oriented education. Last but not the least, invest in yourself!
These are the specific plans an individual should have to beat the uncertainty. Identify and create the strategies to achieve short and long term goals. Having sharply outlined financial pictures enables us to control our expenses, income and investment to manage.
Everyone of us has that hunger to make money. However, we face problems in our finances. That’s due to improper financial management. To have proper financial management we should have basic knowledge on budgeting, saving, investing and the power of compounding as discussed above. Having a financial plan helps to reduce economic distress and acquire financial stability. Get financial literacy, it equips you with an understanding of financial components and skills.Start having habits of Saving and investing from early 20s. Do follow financial plans for building up wealth.
