Strategic financial management is simply a smart and an effective way of managing your money in best risk – reward ratio. Most of the people learn financials just to get a secure job. They get a good job but do not get whatever they dream because they do not follow financial management skills in their own life. Although, it is not taught in our schools and colleges. Here, we are discussing best and easy steps about how a common person can manage money smartly in a proper planning with upcoming needs to achieve the goals.
1. Set up Financial Budget
As our Government set financial budget to meet the targets within the deadlines, people should have also make their family budget to move in a right way. It not only saves your money but also let you understand where to focus more at this time. By making a justified budget, you can do your work more efficiently.
2. Understand Income
Understanding your income with all sources is very essential key point to proceed further in making Strategic financial management. If your dream is big then you have to increase your income to achieve it at right time. It is also true that there isn’t anything that a person can’t do if somebody had already done it. But you have to make better arrangements to achieve it in lesser time.
3. Understand All Expenses
Categorize your daily bills, monthly bills, annually expenses and exclude that much money accordingly. When i used to follow this step, i find a major part of my capital was used in traveling expenses due to flights and unwanted cabs facility. Then i started to travel by train and auto depending on the situation. Likewise, you can also start categorizes your bills.
4. Make Emergency Fund
Nobody knows what will happen tomorrow. Most of the people forget to arrange emergency fund in banks. They pay more amount or ask for financial help from others at that time to get rid of the emergency situation. Sometimes, they pay high interest also to arrange the money on an urgent basis.
5. Invest Savings
It is the key point that will convert your dreams into reality. A common people spend first and do savings whatever left at end of the month and most of them don’t save anything at end of the month. The smart people separate savings first and spend whatever left. Investing money is as crucial point as savings. If you saving your money in banks, you will earn 4-5% return per annum which is less than inflation rate in India. It’s better to invest your capital at better place like Mutual Funds, FD, PPF, Stocks, Gold, Silver etc.
6. Become Debt Free
Living life in debt is like having an additional burden in your life. In most of the cases, people get the loan to buy home, household works, marriage etc. which is not a smart way of growth. It is good if you are utilizing the loan amount in growth of your income.
7. Strategic Financial Management Advice
If people are unaware about the financial arrangements in life, they should try to get advice from a financial agent or experienced profitable investor. Learning should not be stopped in life. Get the knowledge wherever you get. Somebody said, learn like a slave and live like a king.
The most important things to become rich are right approach and discipline to follow it. It’s easy to say but difficult to follow that is why only less than 1% people succeeded.
Write in a comment below what approach you are following in your life to become rich.