Top 6 ways to plan your finances

Top 6 ways to plan your finances

Amongst all the decisions that we take on a day-to-day basis, managing your finances is amongst the most important. Handling the financial part is not rocket science, but it requires a proper framework to get things done efficiently. Finance is the blood of any business (and even your personal life). Therefore, plan your finances so they are well managed.

Here are some easy-to-go ways to strategize your money & plan your finances!

• Manage your money- Be it an individual or a business, we always have some financial goals in our mind like buying a house, a vehicle or goals such as acquiring a new business, opening a branch, expanding operations, etc. To fulfill these goals or to face any other situation, one must learn the art of managing money. Managing money starts with saving. Saving your money for future goals and contingencies helps one in making sound decisions with a sense of security.
• Regulate expenses- You must watch out for your spending habits. Spending more than what you earn is the highway to financial ruin. One must chalk-out a budget and categorize spending as fixed or variable, urgent or non-urgent, etc. If you have to wait for your paycheck and your balances turn red before the next credit, it indicates bad financial planning. Similarly, for a business, it is essential that our quarterly revenue and expenses are balanced and we are not considering projected numbers to increase our spending today. But do differentiate an investment into the business from a running expense and obviously, the case for tech startups is different, as they need to burn cash to have network effects for their business.
• Allocate the surplus wisely- One must acknowledge the real worth of money and deal with the surplus (income-expenses) very cautiously. There are several ways you can allocate your surplus like savings, investing, etc. Surplus money acts a cushion for your future contingencies.

• Maintain a personal investment portfolio- Starting to invest from an early age is probably the best decision one can take. Investing early helps in compounding wealth in the long term. There are several products available in the market like Equity Funds, Fixed Income, and REITs that give good returns. The sooner you start investing, the better.
• Retain a personal balance sheet- Keeping track of expenses, incomes, investments, and savings provides you with an outlook of how well you are doing and how well you are equipped for any contingencies. Maintaining a personal balance sheet helps you determining your net worth. This gives you a clear picture of whether you own or owe!
• Evaluate your position- Once you start managing your money, keeping track of your expenses and regulating your surplus – you will be able to devise a pattern of how you live and monitor your financial wellbeing.

Conclusion- You should have a rock-solid base when it comes to your financial standing. Planning appropriately and taking baby steps towards a better financial position is a must. One must aim at planning his spending and savings judiciously.

At DNAGrowth, we aim at helping clients with accurate and foreseeable forecasts that help them plan for the future in a better and structured manner.