KNOWLEDGE CENTRE Financial Planning / 6 Easy Steps To Be Financially Organized
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6 Easy Steps To Be Financially Organized


Being organized is one thing and being financially organized is a completely different thing. It requires time, planning, and direction to achieve the same. In fact, it may sometimes feel like a full-time job. That’s the reason not many individuals are enthusiastic about organizing their financial documents and working on their goals. Financially-organized individuals are aware of their expenses and income as well as particulars about their investment and returns.

Here are six steps you can use to get financially organized:

  1. Identify your long and short term goals
  2. Keep a track of your expenses
  3. Create a budget and stick to it
  4. Choose the right investment options
  5. Automate your finances
  6. Calculate and track your net worth

1. Identify your long and short term goals

To begin financial planning, you need to determine what you strive for and why you are saving. The reasons may vary from retirement, travel, child’s education, business expansion to buying a new house. Spend time in identifying the goals you want to achieve and prepare a financial plan by prioritizing those goals. For instance, you may have planned to go for a Europe trip after six months, but an unforeseen surgical expense for your Dad comes up. In such a case, you give priority to the medical expenses over your vacation. To avoid being sidetracked, you should plan out your future and create a plan that accounts for all such possibilities.

2. Keep a track of your expenses

After setting your goals, you need to take steps that will help you achieve them. Start by tracking your expenses and see how much are you spending on each. You may begin to track the expenses for a duration of two months so that you know where your money is going. Break the tracking sheet to weekly, fortnightly and monthly expenses in order to gain detailed insights into your spending.

3. Create a budget and stick to it

One thing that financially-organized individuals swear by is following a budget. You may be receiving a handsome salary at the end of each month, but this does not mean you become a spendthrift. Once you have laid out your financial goals and looked at the expenses incurred by you, move one step ahead in your financial planning process by creating a budget and abiding by it. Cut down on the unnecessary expenses and try to save every month in order to get closer to your financial goals.

4. Choose the right investment options

When you are aware of the goals you wish to achieve, you may study the various investment options and choose the one which best suits your needs. Determine the purpose of investment and the liquidity you want to maintain. Compare mutual funds and go for the mutual fund that gives you good returns in the long term. Opt for debt funds, equity funds, or a mix of both depending on your risk appetite. Remember not to invest in a fund simply based on a one-year return. You may set up a systematic investment plan (SIP) and invest in mutual funds every month. The funds are managed by fund managers who will help increase the returns and reduce your risk.

5. Automate your finances

After setting aside the goals, prioritizing your expenses, and developing a budget, you will be able to ascertain the amount you need to save each month. Automating your finances will help you save time and allow you to organize your bills, loan EMIs, and bill payments. You can even auto-debit your mutual fund SIPs from your bank account to simplify your investments. This will reduce your stress and ensure that you make all payments on time.

6. Calculate and track your net worth

Analyzing your assets and liabilities may provide detailed information about your financial position. Determining your net worth is an important step in organizing your finances. You should do it from time to time in order to know how far you have reached in terms of your goals. You may rework on your financial goals after you learn about your net worth.

Financially-organized individuals are very clear about their long-term goals. They weigh different investment options and build a portfolio, which is diversified and carries low risk. The first step to achieve any financial goal is to save followed by investing in the right instruments. Compare mutual funds and make a rational decision by choosing a fund, which has a higher return and will help in the maximization of wealth.

With our Angel Bee mobile application, you will be able to make the right investment choices. The unique feature of the application is the ARQ investment engine, which runs on algorithms and is free of any human intervention. Download the app today and take your first step towards being financially organized.


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