Financial Planning for the Age Group 22-25 years

What is Financial Planning?

A process of determining an individual's financial goals, purposes in life and life's priorities, and after considering his resources, risk taking ability and current lifestyle, to detail a balanced and realistic plan on 'what needs to be done' to meet those goals

It varies from person to person and should be updated from time to time

Why should youngsters do Financial Planning

• To work towards achieving short and long term goals

• To ensure a secure future• To provide for unforeseen circumstances• To earn better returns on their funds, which

would otherwise be idle

What constitutes Financial Planning

• Making a detailed budget of incomes and expenses

• Start by allocating a fixed amount to save every month

• Adjust budget as per execution• Invest the saved money in Financial

Instruments

What Financial Instruments?

• Equity Markets• Mutual Funds• Systematic Investment Plans• Fixed Income Instruments• Insurance• Commodities Market

What determines where one invests?

• Financial Objectives• Priorities• Risk Taking Ability• Ability to Monitor Investments• Idleness of Funds

Thumb Rules• Common sense approach to managing your finances. It cannot change

your situation overnight, it is a lifelong process • Events beyond your control will affect your financial planning results• Set measurable financial goals• Be realistic in your expectations • Understand the effects of each financial decision• Re-evaluate your financial situation periodically• Start planning as soon as you can• Realise that you are in charge