Thursday, June 11, 2009

Financial Planning

There are two kinds of People, first are those who do not know where their next pay check is coming from and the second are those who know where their next pay check is coming from.
Financial Planning is must for everyone from the lower right up to the Upper Class.

Financial Planning has been taught to every child, even you! Remember your Mom telling you don’t buy this don’t buy that it’s not good for you and stuff?? Yup! That was one of your important lessons.. But we as children ignored the Financial Planning lesson and ran out and bought sugary candy which just made us Nuts and eventually drove our Parents Nuts (If you are laughing now don’t forget you will have kids of your own)

The Ideal expense to pay check ratio would be 1 : 2 or even better 1 : 3 and so on.
Every Company aims for it and so should you!
But unfortunately not many get it that way.
But roughly even if you are saving 1/3 of your pay check you are doing well enough.

People are spending a lot on Financial Planning, getting people to help balance their lives. Don’t forget you got to pay people for Financial Planning!
So instead of paying someone for a solution here are some Financial Planning Rules, to keep your self balanced and live a Happy Life.

My Financial Planning MUST-DO List

Financial Planning rule no. 1
STOP using Credit Cards:
As convenient as it is, it’s an added expense and a very good reason to spend money. Only use Credit Cards where necessary. Consider this step as a bad habit and drop it where Financial Planning is concerned.

Financial Planning rule no. 2
Get rid of your Loans:
This is must you have no idea, how light you will feel.
Speak to your Bank and pay more to get rid of them faster.

Financial Planning rule no. 3
Buy in Bulk:
When you buy grocery in bulk not only you get them cheaper you can use them for longer. For e.g. you use 3 soap bars in a week instead of getting just 3 next week, get a pack of 10 you will get it cheaper plus you will save time and money to go back to the Store the following week. Use this Financial Planning rule where ever possible.

Financial Planning rule no. 4
Cut down on luxuries:
You don’t need to eat out everyday, Cook at home sometimes, its healthy (that’s if you know how to cook) and cheaper, Apply this Financial Planning rule where ever possible.

Financial Planning rule no. 5
Get to the 1 : 2 Ratio:
Try as hard as you can to reach to this ratio, earning at least twice as much as your Expenses. This step is a very important step in Financial Planning!

Financial Planning rule no. 6
Save money on Gas.
An article on saving money on Gas can be found "here"


Financial Planning rule no. 7 (to be continued)

Till next time

Dear Reader

RD

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