Personal Financial Planning

Financial Planning

Don’t know where your money goes? Try making a budget. However boring it may seem at first, Budgets are a great way of knowing and controlling where your money goes after it comes into your bank account.

Personal financial planning helps you add meaning to your financial decisions. It is a common sense disciplined approach to managing your finances to reach life goals.

You might want to save some money or buy an expensive gadget but are not able to save up anything from monthly running costs. Try making a budget to realize where exactly your money goes and what you can cut down on to save up for what you want. That way, you can actually spend your money the way you want. Remember, personal financial planning is a process, not a product.

Necessity or Luxury

How are you spending your money now? What are the required expenses and what are optional? Does your monthly spending link up in any way with your financial goals, in the short and long term? Have you set your financial goals?

Make the modifications you need to in your monthly and annual spending by using the tool of the budget. Make a clear differentiation between what are necessary expenses and what are luxuries that seem like necessities to you.

Manage your expenses. Financial planning involving saving, budgeting, investing and reviewing your finances would help you meet challenges with ease.

Age-old Financial Wisdom

No matter how attractive the lures of overspending might seem, wake up and keep your head on your shoulders. Don’t be over-optimistic about your financial future because you really can’t be too sure about what lies ahead. Stick to age-old wisdom passed through axioms like ‘Save for a rainy day’ and ‘Cut your coat according to your cloth’ and you will be happier for a longer duration of time.

One of Hollywood’s highest paid actors, Nicolas Cage, found himself amidst financial ruin. He had to sell off some real-estate properties he owned to pay off the money he owed. So, the money you make cannot guarantee your financial future. Unforeseen expenses come up and throw the best of finances into turmoil on the journey of life.

Be wary of the Competitive Streak

If you see the tendency of ‘Keeping up with the Jones’’ in yourself, get rid of it before it ruins your finances because it truly can. The combination of your competitive spirit and the availability of easy credit options can spell havoc for your personal finances. Self control can create wealth for you in the medium to long run while lack of it can bring you on the road.

Divide and Rule

Try and cover your financial expenses using the larger part of your income but make sure that you save at least some portion of it. Ideally saving 30% of your income can be saved away for your medium to long term financial goals but even if you can manage to save 15% to start with, it should be fine. The important thing is to inculcate the discipline involved in Budgeting and saving.

Stick to your Budget

Many people create a budget but few have the discipline to stick to it. If your financial goals are important for you, resist from deviating from your budget. In case you receive a bonus or a raise in income, allocate more for the investments rather than spending it all away on luxuries.


You must consider the short and long term effects of your financial decisions on your life. Making and sticking to a Budget is important for ensuring that your money goes where you want it to. Control over where it’s going can be achieved by making and following a Budget.

You must concentrate on developing a personal financial plan to meet your goals and objectives. Personal finance planning guides you to have a much greater confidence of where you are going in life and reduces your stress levels to enjoy more life.

Remember some age-old financial wisdom and wake up to any inner processes that might spell trouble for your financial future.


About the Author

Supradeep Mukherjee is an author, trainer and broadcaster. Educated at Hindu College and the Delhi School of Economics, he has consulted with a number of corporate organisations, radio stations and academic institutions. His areas of interest include Personal Development, Parenting, Relationships and Lessons in Living from Mythology.

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