Financial Planning Tips

Financial planning is essential for our life. However, having a financial plan is not enough. Even more important, you have the right to prioritize the financial plan. Even if you have very identical plan tailored to the investment, in fact there are priorities that apply to everyone in the making of financial planning. Is it?

When making financial planning, we must start from the highest priority. Is it for investment? Of course not!

First, we should check and pay off consumer debt. Come check out this list of our debt, are there any outstanding credit card debt and unsecured debt balances? If there is, then pay off the debt first is the money savings you have.

If you like to pay credit card bills with numbers that remain, such as Rp 5 million per month, eliminate the habit. We should always use a credit card to pay off, regardless of the amount of the bill.

Second, the cash flow should be positive. This applies to cash flow monthly and yearly cash flow. Household expenditure, electricity bills, monthly expenditure, as well as personal shopping, shall be paid a monthly salary. While the cost of the holiday, land and building tax, the cost of sacrifice, and other expenses shall be paid from the fund bonus and holiday allowance .

If you are not a permanent employee, when he gets the money, get used to directly share amounts to 12 months. Well, how do cash flow positive? Easy, do the pegs than the pole!

Third, having an emergency fund. After our positive cash flow, then the third priority is to have an emergency fund. When faced with unexpected conditions or requirements, which plays a lot is an emergency fund. Because the insurance function is only to replace the money after the claim event is received.

Well, the product to keep an emergency fund of course, must be highly liquid financial instruments and low risk. Like it or not, saving the best place to store emergency funds. If the ideal target is reached, you can keep the excess money in money market mutual funds, bonds retail Indonesia, or even gold.
Buying insurance products

Fourth, determine financial goals. The main essence of a financial plan is to have financial goals. The dreams are not financial goals. Investment nor financial goals, because investing is one strategy achieving financial goals.

A destination must have a target cost, duration, and strategies to achieve them. If not, that's just a work of literature.

Fifth, the strategy according to financial goals. Well, this part is a challenge for many people trying to make their own financial plan. But it is not impossible, but must be chosen carefully according to your risk profile, financial resources, timeframe and target return is desired.

Before determining the product, you are required to fill out questionnaires risk profile. The goal is to find out if you are a conservative (true savers type), moderate (saving half, half the investment), or an aggressive (search type returns as high).

Sixth, purchase insurance products tailored to their needs. Many people are getting insurance. But among those very few who know exactly what they purchase insurance. Insurance needs should be a priority because we may not have the ability to pay premiums ideally. The order of compulsory insurance is life insurance (for having dependents), health insurance and general insurance.

Insurance is not an investment. You must meet the income protection insurance, and meet the need to achieve a balance with investment targets. Make sure, too, that we are wholly owned investment under your control. So, do not be prioritized to pay insurance premiums automatically.

Based on the presentation, everyone can have a financial plan. By using the right priorities, life is more beautiful and prosperous as desired will be more quickly realized. But the plan is not enough. We need real action.

Related Articles