We all seek to have some sort of financial kitty ready in the future that gives us the freedom to live our lives freely. Also, we aim for seeing a certain amount of saving every month, so that this money gets piled up in the future and we can fulfill our financial dreams.

All these looks very easy on paper but to maintain a certain balance and grow a fund to fulfill a financial goal is difficult in reality. Many financial problems occur even daily that hinder the construction of the fund we have in our minds.

Let’s just glance over some of the few types of financial problems we may face in our day to day life:

• Daily expenses shoot up often over the mentally perceived pre-defined limits
• One-time expenses ruining the plan, of accumulating a particular balance say over a month or year
• The emergency medical situation arising
• Lending a large sum to relatives
• Job loss
• Marriage or other life event-related expenses
• Low knowledge of the financial markets and financial instruments, preventing us from making financial investments

All the above mentioned problems can easily be solved by personal financial planning. In personal finance Financial planning is the process which provides us a strong disciplined framework for achieving our life goals in a systematic and planned way. This also makes us strong for the situation mentioned above by preparing us or rather equipping us with buffer kitties against all shocks and surprises.

Following are top 5 financial planning solutions which one should follow for better planning and financial freedom:

1. Manage the Money

The golden mantra behind managing the money is deciding to save it. Saving money is a very powerful tool towards greater financial independence. We may have many financial goals in your mind. Like owning a vehicle or the latest smartphone or even wealth accumulation. In all these situations, we need money.

Not only normal saving but systematic saving regularly should be our motto. This money can either be invested in SIP Mutual Fund which actually allows saving funds and at the same time provides better returns.

Some simple mantra can be ensure that we save 10% of our income every month.

2. Expense Management

We should know our expenses in advance, for one time expenses a small buffer or a kitty can be created. This way we are better prepared for planned and unplanned expenses.

3. Creating personal investment Portfolio

We should plan for retirement and other future events. This is very difficult with keeping money in savings bank as the returns from a savings bank is just around 4%. To start with investments we can try mutual fund and progressively move towards riskier financial instruments like share/equities. Building a portfolio involves distributing your investment amongst asset classes like equity, debt, and cash.

4. Manage our Debt wisely

Lack of debt management may lessen up a major part of our monthly paycheck. However, strategizing debt payment may keep us away from such troubles. All we need to know is the debt repayment schedule and the future liabilities against it.

In case we have big-ticket loans, we should knock off debt which is more costly to us. Or we can transfer our loan to another bank offering a lesser rate of interest. It is advisable to have little debt on our personal books as it keeps our expenses disciplined.

5. Planning our Taxes

In tax planning, we analyze our finances from a tax efficiency point of view so as to plan these in the most optimized manner. We attempt to take advantage of the various tax exemptions, deductions, and benefits so as to reduce our tax liability at the end of the financial year. We can use 80 C, 80E, 80 CC and various other exemptions for tax exemptions.

Personal finance might seem very easy at some time but it is very hard to maintain. This is a continuous process in which we have to dedicate our resources to have a bright future. This field is a growing field there are various books available on how to better manage your money. There hundreds of online blogs on personal finance guiding us on how to manage expenses, start investing and other useful things.

It is truly said,
“You can make EXCUSES and earn SYMPATHY,
 OR
 You can make MONEY and earn ADMIRATION.
 The choice is always yours...”
 ― Manoj Arora, From the Rat Race to Financial Freedom