Financial planners are usually forward looking. They like to keep their finances under strict control. They pre plan the expected spends and incomes to evaluate their monthly budget. The most effective measures for the financial planners can be to measure the positives outcome over negatives.
1. Failure to pre-plan: Individuals should always estimate their spends, earnings, savings and investments with a clear thought. The future goals and resources must be chalked out well to create value and revenues in the end. The best utilization of resources is the key to best achievement to attain financial management. With a missing financial plan, and it’s difficult to know where are we headed and how to meet the end objective.
2. Failure to convey: Every partner has a different way of investing and handling money. Its best to have an open discussion to avoid any future financial conflicts. Timely reconciliation of money matters can be really helpful. Money conflicts can turn extremely unhealthy for a happy household. It’s always recommended to have an open conversation about finances to your partner and keeping no connect untouched. Every financial communication must be done with full transparency, involving all parties. Just keep clarity with your children, parents, grandparents, etc.
3. Be extra proactive with your savings: Individuals generally await hefty packages to start saving money. They forget to remember that every drop counts. This negates the possibility of term compounding. Picking up pace with time is almost impossible, so savings with a purpose is proposed. Let’s assume you have invested 10 lacs in a project and have an average return of about 10% too, then the accumulated wealth would nearly be 100,000. However, if you wait for the next 10 years more, you will lose nearly 80,000 to reach where you are.
4. Failure to bifurcate personal spending: The stock market always believes in making diversified investments. Bifurcation goes beyond investments; it applies to personal financial management. If unfortunately, you are terminated or fired, your savings will come to rescue. You last employer could easily impact your next employment. Every hit in your industry will have a greater impact on your survival per se. So, try and strike a balance between your employment and household conditions.
5. Following the market: In the early nineties, individuals were tremendously interested in stock markets and speculations. However, this was more like living at the edge. With greater focus on stocks, chances for failure almost doubles. The idea for such investments should be fine tune your life goals instead of beating around the bush. Invest as much as you like, however keep your risk levels low.
6. Anticipate negatives well in advance: It’s foolish to not account for negative situations. All the unforeseen events can take place without prior notice in life. Newspapers and magazines can be always helpful to update you with relevant news pieces. Families should be able to cope up with the announced events. As an example, enough funds must be stacked up to services disabilities or shut out.
7. Outsource responsibilities: Ofcourse, you know the best about your finances and expenses However, it’s better to let the owners take lead. Outsourcing the financial responsibilities can prove extremely valuable. They will look at a situation objectively, to carefully weigh the costs. A professional planner can take onus and engage to provide sound technical advice and, most importantly, encourage you to put your financial management in place.