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Finance planning is the most important need of our life. In today’s , financial planning is necessary for people for all ages. We all know that just as food is a basic necessity for life, so is money for live a life.Therefore money Must be managed.
What is finance?
Finance is all about money, from whom to invest, to budgeting. Money is a word that pertains to everything in the world. The most important thing for you is to buy anything. Of course, oxygen is just as important as money for survival.
If money is important to you in your life, then why do you neglect money management so much?
The biggest reason behind this is that in your school, college or university you are taught about making money but no one teaches you how to manage money or how to manage money.
Money is related to everything, if you have money, you are respected in the world. This is the reason why any country is able to show its strength to the world only when its economy is good, so all the countries in the world are trying to grow their economy. For example, the US economy is number one in the world, so it is considered the most powerful country in the world.
In this article, we will give you maximum information related to financial planning, so that you do not need anyone else for financial planning, you will be able to do financial planning yourself.
What kind of finance is that?
To understand finance planning, you need to understand what is the type of finance?
Although there is no limit to the type of financing,there are mainly three types of finance.
Let us now understand all the types of finance in detail.
It is public finance to know and understand government matters related to finance.Under that, all the work related to government money has to be tracked. Under this, all the revenue, expenditure, taxation and policies of the government are analyzed.
Public finance is divided into four major parts.
- Public revenue
- Public expenditure
- Public debt
- Financial administration.
Corporate finance is such that it includes finance, structural set up, investment, dividends, and so on. Investments, loans, etc. that have direct contact with corporates in the country. All financial matters related to business.
Money used for oneself or one’s own money is called personal finance. It covers everything related to managing and managing your money. For home expenses, there are a number of things that can be done to keep track of your own earnings, expenses, savings and investment.
This includes everything related to you and our money.
- Own salary
- Credit cards
- Home loans
- Personal loans
- Stock market portfolio
- Life insurance
There is another type of finance
Investments made to shareholders in any company or funds given to startups.
Money is borrowed from any person, organization or company.
Example Bank loan money.
How to do financial planning?
What is the nature of finance? Everyone must have got the answer. But it is not only necessary to know, the most important thing is to know how to do financial planning.
In fact, there are ups and downs in everyone’s life. So if you keep your money in advance, it will be very beneficial for you.
Let’s take a closer look at this financial planning.
There are two main ways to finance a plan.
- Rely on an Expert’s
- Decide for yourself
You will have the most accurate calculation of your income and expenses. You are the best person in the world who can understand you. Everyone’s income and expenses are different in the world, so financial planning should also be different for everyone. Financial planning should be kept.
Understand your financial situation Monitor your own expenses and know and understand your basic financial situation.
- Do you understand how much it costs? And how much?
- How Much Money Will You Make?
- How much will you save? To know your own financial position, you need to divide your finances into two financial statements – Net Worth Statement and Cash Flow Statement.
This will let you know if you have the property and if so, if it is useful.This means that you will get better information about your net assets.
- Are you writing the source of your income in the cash flow statement?
- What is your total income?
- How much does it cost you?
- How much money will you save in a month or a year?
When you calculate all these things correctly, you will get information about your financial status. From here you will have a lot of key points – how much net property do you have? What is your net income per month? How much control do you have over spending? Is investment or insurance enough for you? How much of your earnings will pay off the loan installments?
Also make a list to set goals – write down everything you want to achieve in life. Write everything down well and also write down when these things are necessary in your life?
Example– If you want to buy your own car and house, then you write down in full how long these things will take and what will be the total cost of those things?
Write down all the goals of your life on one page
- When you have children, how long and how much money do they have to study?
- How much money should you have in your retirement fund when you retire?
- If you have taken any loan, how long will it take you to repay the loan?
- If you want to travel abroad, when and how much will you travel?
See the difference between your goals and your financial situation You can see your current financial situation and understand your goals.
If you want to achieve your goals, then you need to follow these steps.
Personal Finance Planning In this you have to create a financial plan according to your objectives and your own financial situation. Many questions will come to your mind while making this plan.
Like that :
- How much money do I want to save per month or in a year?
- How to achieve my goal if my income is less than my goal?
- What else can be done to increase income?
- There will be different ideas of investing. How much to invest?
- How much to put into the emergency fund When this plan is ready, we will see hope for a better and more appropriate way to reach our objectives.
- Do you think that you can achieve your goals?
- Along with this will also know how we can meet our objectives?
What mistakes do we make when finance planning ?
When making a financial plan, we make a lot of mistakes that seem very small but spoil our whole plan and these small mistakes spoil our plan.
We are focusing on some mistakes, seeing these mistakes we should already understand that we should never make this mistake.
To achieve the goal according to the plan on the money of others.
- Spend a lot of money.
- Don’t invest.
- Everything will go wrong.
Never use these thoughts. When you have already created the idea in your mind that whatever I do or whatever I do will be wrong or even if it happens it will not be good. So you may not be able to do your job well, so think positively from your heart to improve your financial planning.
Ability to plan more than one
When planning the economy, we enthusiastically plan things that are beyond our capacity and then we get frustrated because we plan beyond our capacity and we don’t plan again. Start to panic.
Find your money
These mistakes are very common. For some reason, we are unable to invest the money that we are trying to invest in. If you want to achieve your goals according to your financial planning, you also need to avoid these mistakes.
If you don’t execute your finance planning properly, any work you do will be completely useless and after making this mistake you will start misunderstanding financial planning yourself.
Investing is not the fault of one or two people but the fault of the whole country. Our country is far ahead in savings, but far behind in investment. Money from investing comes in a circular mode and keeps circulating in the market. Which makes more money.
Only 4-5% of people invest in India while 60-70% of people in the US invest there. This is also one of the reasons why the US economy is so high, so if you are also planning an economy, be sure to include this aspect.
What is the difference between finance and economy?
Not all of us understand the difference between finance and the economy, so let’s also understand the difference between the two. The economy is in a way a whole sector related to production, distribution and trade. So finance is a part of it. The economy can grow through the economy. The performance of the country, region and market comes down to the economy.
What is this financial analysis?
Now understand what is this financial analysis?
In fact when the meaning is well analyzed it is called finance analysis. It is used in business, it creates a different view for the financial data of the company.
Finance Planning tips
At the end of the blog, here are some finance tips for you
Never buy goods or start any business with the money you have taken.
Always keep your retirement funds and emergency funds separate.
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