We all know money is a very important and sensitive topic in everyone’s life. It plays a very important part in one’s life in what it can do for us to solve at least some of our problems if not all.
Having an organized money life can be very empowering because it gives you a sense of great control in terms of how you can deal with situations that are either planned or unplanned.
When we talk about organizing our financial life, it is because it not only helps our family and us today but it probably helps us significantly from a tomorrow perspective as well. Many of us will probably like to have something left behind us when we are not in this world anymore.
The use case of money for you is only till you pass away, hence the need to organize and look beyond the present while making money-related decisions so that it is of use not only for you but also for the next generation.
We have observed that a majority of people make financial decisions based on their past experiences and not necessarily on their goals and objectives and this is where most of the problems lie. We believe that you can organize your money life irrespective of your life stage and/or income level. The right time to start is now.
Organizing your money life not only solves your money-related stress but also helps you to confidently progress towards achieving your financial goals and securing your financial future.
In this blog, we lay down 7 steps that you can take to organize your money life for today, tomorrow, and beyond.
Budget: Each individual should have a sense of a monthly budget so as to understand his/her monthly expenditure. This will help bifurcate the expenses that are discretionary and those which are non-discretionary. This will help to identify the unwanted expenses so as to make savings that can be invested for the future as needed.
Tomorrow acts like a bridge between today and beyond, so one must make investments from the savings so as to be financially secure tomorrow.
Invest in yourself: As Warren Buffett says “The best investment you can make, is an investment in yourself”. One should continue to invest in oneself by acquiring new skills which can be treated as an asset for your profession or by your employer and help to generate more income. Hence, it’s not only for our children who need to keep getting better at what they do we need to do that for ourselves as well.
Emergency Buffer: No one can predict a crisis or pandemic and COVID-19 has made everyone realize the importance of an emergency buffer. You should make a minimum of 6-12 months of emergency buffer based on your monthly expenses, as in case of a loss of job, or any unwanted crisis you can sustain your current lifestyle.
Define your Goals: Once today is organized one can look at tomorrow and start defining the goals. Goals will change over time and with life stages. In addition, depending on if you are going through a life transition, major life phases like marriage, the birth of a child, the death of a spouse, or divorce, an organized money life will help. Hence, it is critical to think of your goals and plan accordingly.
A Single Place – Having everything in one place is remarkably helpful for your family and you. It is the ISO gold standard for your money life. If you can retrieve everything from one place it saves the hassle for your family members and also saves a lot of time. Apparently, you don’t need to put much effort into bringing everything in one place, something as simple as good old excel can play a role, as long as your family and you know about it and anyone from your family can easily retrieve it in your absence.
Make an estate plan: It’s important that the money that you have worked hard for serves you in your lifetime, and your children after you. By making an estate plan, a will, and/or a trust, you can help organize your assets to flow smoothly to the family and avoid feuds.
Giving back – If you feel that you have enough or will have enough, you can take up a philanthropic cause, or try to give back to society. Organizing your money to flow to such a cause where you can make a meaningful difference to other people who are probably not as fortunate as you are.
The above steps when done well systematically and continuously can make a big difference to how you feel about your money life.
A financial planner can help you to organize your money life based on your priorities, your goals, your risk appetite, and your investment approach. A financial plan with your financial planner could help you to keep track of your money and plan the necessary changes that are needed to keep it organized continuously as well.
Organize your money life today for a better today, a brighter tomorrow, and a prosperous beyond.
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