How to 
Make Better Financial Decisions
Making wise financial decisions is essential for both individuals and families. Managing our finances is crucial in a world where money plays a significant role in our daily lives. Every decision we make regarding our finances, whether budgeting, investing, or planning for the future, can affect our financial well-being in the long run.
Financial decisions encompass various choices, from everyday spending habits to major life milestones such as purchasing a home or saving for retirement. It takes careful consideration and strategic planning to maximize our hard-earned money.
By controlling our financial decisions, we gain the power to shape our future. It enables us to prioritize our objectives, whether debt repayment, emergency funds, or saving for education or retirement. Effective financial planning can establish a stable foundation for individuals and their families.
A typical financial dilemma is how to allocate savings for multiple goals. Should you save for all goals at once or fund them individually? There are two approaches to financial goal-setting:
Concurrently
Concurrently, it refers to saving for multiple financial goals simultaneously.
The ability to simultaneously save for various financial goals is a testament to dreaming big and planning wisely, embracing abundance and possibility.
In saving money for multiple goals, we acknowledge life’s complexity and strategically allocate our resources. From down payments to education to emergency funds, there are various aspirations that we can pursue. By recognizing these different goals, we can better plan and manage our finances, ensuring that we can achieve our objectives in a timely and effective manner. This approach requires careful consideration and attention to detail, ultimately leading to excellent financial stability and success.
Sequentially
Achieving financial goals by focusing on one at a time using a systematic approach.
Adopting a systematic approach can heighten our likelihood of success when striving towards financial objectives. By channelling our focus towards a singular goal at a time, we can effectively break down our aspirations into more manageable steps.
There are pros and cons to each method of goal-setting. Some prefer to work on multiple goals simultaneously. In contrast, others find it more effective to prioritize and tackle them sequentially. By taking a step-by-step approach, you can give each plan the attention and resources it deserves.
Consider factors such as urgency, feasibility, and personal preference to determine the best plan for your needs. Assess which goals require immediate attention or have the highest impact on your overall financial well-being. Additionally, evaluate your resources and capabilities to ensure that you can commit fully to each goal without spreading yourself too thin.
Remember that Rome wasn’t built in a day – achieving financial goals takes time and dedication. Focusing on one goal at a time using a systematic approach tailored to your unique circumstances can pave the way for long-term success and fulfilment. Stay committed and believe in yourself – every small step counts towards reaching your ultimate financial aspirations!
Here are some steps you can take to progress towards your goal.
Based on past experience, I offer five ways to help you make better financial decisions.
1. Consider Comprehensive financial planning.
When it comes to financial planning, it’s essential to consider a multitude of factors all at once. This includes income and expenses for investments, debts, and long-term financial goals. Individuals can achieve their financial objectives by taking a comprehensive approach to financial planning and making informed decisions. It’s also important to regularly review and adjust financial plans to account for changes in personal circumstances or external factors affecting the economy.
Rethink the practice of completing financial goals one at a time. Concurrent goal-setting will maximize the tremendous power of compound interest and prevent the frequently-reported survey result of having the completion date for one goal from determining the start date to save for others.
2. Encourage more positive financial behaviour.
Do more of anything positive that you’re already doing to better your personal finances.
Suppose you set aside 5% of your income in a National Pension System (NPS) account or Public Provident Fund (PPF) for retirement. In that case, it may be worth considering increasing your savings to 5-7%. This will likely provide you with a more secure financial future and allow you to enjoy your retirement without worrying about financial constraints. It’s always important to plan ahead and make intelligent financial decisions, and by increasing your savings, you’ll be taking a step towards achieving your retirement goals.
3. Improve your financial habits by reducing negative behaviours.
It is wise to consciously cut back or eliminate costly behaviours that could compromise financial security. Consider the potential cost savings that could arise from such a change and any potential health impacts that could result from these behaviours. Lastly, consider how much personal enjoyment you derive from these activities and whether or not it would be worth the financial and/or health risks that come with them.
If you’re a millennial or nearing retirment, striving for a secure future, “JOYFUL RETIREMENT: The 7-Step Strategy for Healthy, Wealthy, and Early Retirement” could be the perfect solution. With this book, you can feel empowered to create a retirement plan that gives you confidence and peace of mind.
4. Ensuring that funds are set aside for retirement
Prioritizing retirement savings is critical, yet many individuals in India need to pay more attention to this significant responsibility. Remember that the choices we make today impact our future selves. Even small monthly contributions of Rs. 100 can add up over time and make a significant difference.
5. Consider seeking professional assistance.
Achieve your financial aspirations with the guidance of a professional planner. Together, you can establish objectives, develop strategies, consistently assess progress, implement solutions, and enhance your ability to manage your money and cultivate a desire to save.
In conclusion, empowering yourself with strong financial decision-making skills is the key to achieving financial independence and reaching your goals. Taking control of your finances and making informed choices can pave the way for a more secure and prosperous future.
Remember, every decision you make regarding money can shape your financial journey. It’s essential to educate yourself, seek advice when needed, and always consider the long-term consequences of your choices.
“Arise, awake, and don’t stop till you reach your goal.” ~Swami Vivekananda
Feel free to take risks or pursue your goals outside your comfort zone. With determination and a strategic mindset, you have the power to create a life of financial freedom.
So go ahead, equip yourself with knowledge, set clear objectives, and take action towards achieving your dreams. Your future self will thank you for it!
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I am a CERTIFIED FINANCIAL PLANNERCM and CHARTERED WEALTH MANAGER®, dedicated to helping my clients achieve financial freedom and experience the joy of being in the HappyMoney Zone. For the moment, I have shared my experience growing up with you because it had a tremendous impact on how I do what I do. If you have a question about your financial situation, please connect me. I would be delighted to try to be of service. Don’t miss any future posts; please subscribe via email.
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