LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » Personal Finance News

How to build financial plan: 5 profitable power points

Earlier I have written about merits of financial planning and how to manage its pitfalls. Today lets talk about how to build your own financial plan.  

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
How to build financial plan: 5 profitable power points
Our marked approach for the financial planning process, named Financial Planning Pyramid came handy. Image source: DNA
Written By: ZeeBiz WebTeam
Updated: Mon, Sep 03, 2018
10:58 am
ZeeBiz WebDesk

Earlier I have written about merits of financial planning and how to manage its pitfalls. Today lets talk about how to build your own financial plan.

During a financial awareness workshop, one of the questions raised was: “What makes a good financial plan and can you explain in a simple manner without any complex jargon?”

Our marked approach for the financial planning process, named Financial Planning Pyramid came handy. Let me share the essential pieces that lead to the financial planning building blocks.

Dream: List down all the short-term (less than three years), medium term goals (three to seven years) and long-term goals (seven years and more)

Reality check: Pen down monthly income, monthly expenses, break down the amount needed for essential expenditures, lifestyle expenditures, EMIs) to arrive at your ability to save; and also list down loans and liabilities.

Available resources: Resources that you will use to achieve your goals. Your existing assets, your existing income surplus.

Way forward: Is a simple snapshot of the financial plan.

The alphabets “ERGRE” sums up the five building blocks of the financial plan.

1. Emergency fund: An emergency fund set aside to meet expenses related to emergency (good/bad), such as sudden travel for marriage of a close relative, gifting a new born of a close family member, repairs to your car, etc, ensuring that long-term investments are not disturbed.

2. Risk protection: Term insurance, health insurance and personal accident insurance (covering temporary, partial or permanent disability) are must. Term insurance is a pure insurance provides a high insurance cover by paying low premium an income replacement strategy. If the person does not die, but is rendered partially and permanently disable, the personal accident insurance comes handy. Health insurance is a must even if you have a company provided one.

3. Goal planning: Post listing down the goal, it is important to assign a current value to each goal; then factor appropriate inflation to each goal to arrive at the future value that will be needed when the goal matures.

4. Retirement planning: Retirement is a separate goal, given its importance. Advanced medical facility is increasing the human life-span. Not receiving salary for few months can be a nightmare for many; leave alone funding for 30 years on passive income.

5. Estate planning: Nomination is not a will. Making a will doesn’t cost anything, but will save a lot of hassle. A will, along with the complete record of all bank accounts, financial assets, insurances, loans and digital assets, such as, collection of arts, photographs, music, etc, are a must.

Watch this Zee Business video here:

The first two ER (Emergency, Risk Protection) helps to protect hard-earned money

The next GR (Goal & Retirement Planning) adds direction to invest and enables

The Final E (Estate Planning) allows to seamlessly transfer the wealth to loved ones.

By, Tanwir Alam
(The writer is founder and CEO, FINCART)

Source: DNA Money

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
financial plan
RELATED NEWS

LATEST NEWS

In chat with Anil Singhvi, analyst Vikas Sethi recommends Hikal, Biocon as top buys for big gains

Kisan Vikas Patra scheme offers 6.9 pct interest; Which other schemes are offering HIGHER INTERESTS - Know here

Stocks in Focus - ACC, Bajaj Consumer, ICICI Prudential, Crisil, Alok Industries - Q4 results to be announced on Monday; stocks likely to remain in focus

Petrol, Diesel Price Today – Rates unchanged on Sunday in 4 metros; Do this to get latest prices in Delhi-NCR, Mumbai, Kolkata and Chennai

Flavoured milk taxable at 12% under GST: AAR rules in Amul dairy case

Facebook privacy breach - Lesson for Organisations to learn from this

Gold Price Today 18-04-2021 – Be prepared to pay more for Gold, Silver; not just coronavirus, bullion prices may jump because of THIS reason

Medical Oxygen Supply – Centre takes this step to meet demand as cases rise to over 2.6 lakhs

This Google feature called 'Trash Bin' to deleting files on Android 12

Routine Immunization during COVID-19: Debunking myths and what parents need to know

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved