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Simple Steps to Do Your Own Financial Planning

Simple Steps to Do Your Own Financial Planning

When you hear the term financial planning, the first thing that comes to the mind are complex financial statements and financial advisors. Ever thought about putting together your own financial plan? No one could know your financial needs better than yourself. Planning for a secure financial future might seem like a daunting task, especially if you are not sure about what your financial goals are. Intimidated by the uncertainties, most of the people end up hiring financial advisors to chalk out a financial plan for them. However, it is not always necessary to hire a professional to get your finances in order. Given below are a few simple steps that will help you do your own financial planning:-

  1. Set goals: – Goal setting in relation to your finances is the first step towards planning your finances. You need to be clear about what you want to achieve financially so that you can plan accordingly. Think about both short term and long term goals. Short term goals would include paying of small debts like credit card bills and long term goals would include children’s educational fund, retirement funds etc. To help you estimate the amount of money required, there are financial calculators such as retirement calculators, term premium calculators etc. which are available in the Aegon Life website.
  2. Asses your current financial standing: – Before you set about planning for the future, you need to have a good understanding about your present financial situation. Calculate your net worth by subtracting your debts (liabilities like mortgage loan or credit card balances) from the total amount of what you own of value (assets like your retirement and bank account balances). Don’t be disappointed if your balance is negative. A sound financial planning will enable you to turn around your finances.
  3. Stay protected: – you need to make provisions to stay protected from unforeseen financial disasters such as accidents, loss of job, high inflation etc. To minimize the impact of such financial hazards, insurance is a must. Life insurance, health insurance and motor insurance must be a part of your financial portfolio. Even if you have existing insurance plans from your employer, it should be supplemented with insurance that you buy on your own. Chances are, you need more coverage than you think.
  4. Learn to invest in the stock market: – Investing in the stock market is a great way to boost your wealth. Educate yourself on the basics of investing, learn the differences between stocks, bonds, mutual funds and exchange-traded funds, the various risks involved and the importance of diversification.


A Simple Financial Plan for Everyone

A Simple Financial Plan For Everyone– Aegon Life - Blog

Everybody has goals in life, but people often have no idea to go about realizing them. Be it buying a home, saving for college, or starting a business, everything requires money. This is where financial planning comes into the picture. Financial planning provides meaning and direction in order to meet your financial goals. A sound financial plan will act as a buffer during the various ups and downs of life.  It helps you to convert your financial goals into action plans, and provides the direction and discipline to achieve these goals.

Contrary to common belief, financial planning does not involve complicated calculations and risky investments. There are various simple and safe investment tools available these days that can be safely utilized by all. Here are a few simple financial planning tips that everyone can follow:-

  1. Asses your financial situation: – In order to know your financial standing, you need to compare your assets against your liabilities. Document your total assets and liabilities along with their value. Then, subtract your total asset value from total liability to obtain your personal net worth. Your net worth is a reflection of your financial situation at this point in time. This valuation will assist you in planning your future expenditures in an efficient manner. When calculated periodically, your net worth can be viewed as a financial report card that allows you to evaluate your current financial health.
  2. Set financial goals for the future: – Regardless of the life stage you are in, you are likely to have some short and long term personal financial goals. Setting tangible goals and following them while monitoring your progress, is the key to success in achieving all of your financial goals. Therefore, list down your goals as well as classify them as short-term, mid-term or long-term goals.
  3. Invest adequately: – There are several investment options available in the market to suit the financial needs of all types of people. If you are risk averse, opt for low risk investments such as fixed deposits or debt instruments. On the other hand, if you are ready to take risk, you can opt for equity based investment instruments that provide higher returns. To ensure financial safety in the long run, opt for insurance plans such as iGuarantee to get assured returns on the investments.
  4. Insurance: – Life is full of uncertainties and risks. At times people fall prey to mishaps and adversities. Hence insurance has become a necessity, as it provides financial protection against incidental expenses. Taking up a life insurance policy is especially important if you have dependent members in your family. One is also eligible for tax benefits on the insurance premium you pay. Moreover, the investment gains that your policy fund generates are tax free.