Hindu New Year 2024: Secure your future with 9 financial planning rules

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Assess your financial condition: The initial and pivotal step towards attaining financial freedom is analysing your financial status. Begin by monitoring your income sources, such as your salary, any additional earnings from side jobs, or passive income. Next, categorise your expenses by listing both fixed and variable ones, such as rent, utilities, groceries, and entertainment costs.

Establish financial objectives: Employing the S.M.A.R.T. framework is essential for transforming your financial ambitions into tangible outcomes. Here’s how to integrate S.M.A.R.T.

principles into your goals can significantly impact your success: S - Specific: Avoid vague goals such as “save more money." Instead, define specific objectives like “save ₹100,00 for a car down payment within one year." M - Measurable: Establish measurable milestones to track progress, like “save ₹10,000 monthly to achieve my financial goal." A - Achievable: Ensure goals are attainable given your current financial situation, including income, expenses, and resources. R - Realistic: Set realistic goals that align with your capabilities. For instance, saving ₹50,000 in a month might not be feasible.

T - Time-bound: Assign a timeframe to each goal to create urgency and maintain focus. By following the S.M.A.R.T. framework, you can transform abstract financial aspirations into actionable and achievable steps.

Comprehend the balance between risk and reward: The correlation between risk and reward is a key principle in financial planning. Risk denotes the chance of losing a portion or all of your invested funds. Various investment choices come with different risk levels.