A financial plan creates a roadmap for your money and helps you achieve your goals. If you are new to financial planning, then this is the right time to begin! It comes with objectives, such as determining capital requirements and framing financial policies. Financial planning sets financial goals and achieves goals for wealth creation and future financial security. Many people are afraid to look at the term financial planning and think they need some kind of expert knowledge about their finances to manage their finances wisely. Actually the more experienced you are in this field, the better, but you don’t need to be an expert.
Some pretty basic guidelines will help you master money management in no time, no experience required. Dan Pimental will give you five golden rules for beginners in 2021. These financial rules shall never change or become irrelevant. Follow Dan Pimental 5 golden rules if you want to protect your finances against uncertainty. Here are five golden rules of Dan Pimental financial planning.
- Plan Early
To make your plan bear the fruit of your wish you always should plan your investment and savings early in your life. It is very important to have a plan to keep your finances on track. Planning provides you with a framework for achieving your life goals in a systematic. People at the beginning of a career are often quite ignorant of these kinds of steps but it is a little too late to plan to carry the fruit of their desires when they realize year after year.
- Manage Your Money
The first thing you need to be aware of, is your cash flow. Deciding to save is the first step towards money management. Even if you do not invest, at least save. It is a good idea to understand how much income you currently have and start saving. This practice will keep you in a safe zone and helps you to be financially balanced.
- Creating Investment Portfolio
Creating your investment portfolio will be a great milestone itself. Diversify the sums according to your investment goals. Every investment portfolio should have some tax-saving components that can soak the entire deductible limit of your taxes while maintaining consistent growth. You having an investment portfolio makes you among the top 10% of the world’s population. Creating a portfolio involves distributing your investment amongst asset classes like equity, debt, and cash. You can do it once in every six months or a year.
- Regulate Your Expenses Wisely
If you do not know where your money is being spent or if your hand is free enough to spend all the money, then it might be a danger sign. So, if you can regulate your expenses wisely it will help create real wealth and create real financial security. Try making a budget. A budget simply shows how much money you have coming in and how those funds are spent.
- Monitor Investments Periodically
Monitoring your investments periodically is very important. An excellent financial plan means investing wisely in the right financial products. Creating a plan and building a portfolio may go to waste if you do not monitor it periodically. Review your investments regularly to make sure they are working well in relation to your goals. A review is essential to mark the progress towards your goals and take corrective measures, if required.