Starting out on one’s financial well-being journey can seem daunting initially. So many aspects to consider, so many products to choose from, and so many different variables to consider. But the basics of a financial game plan are simple. So, if you are someone new to this, then don’t worry, we got your back. In this article, we share with you a few easy steps to follow.

1. Build a Budget

The first step, learn the art of budgeting. Create a detailed budget comprising information on your income and expenses so that you can track the same from time to time. Alternatively, you can use specific budgeting apps and/or spreadsheets to manage your finances effectively and efficiently.

As your income increases, avoid inflating your lifestyle, as it might exceed the budget. Continue living within your means by trying to save and invest more.

Considering the long-term picture, you can also plan for your retirement by including savings for the same in your budget, as savings for planning retirement early can help in the creation of sufficient wealth at the time of retirement.

2. Creation of an Emergency Fund

One must work on creating an emergency fund that can prove to be quite useful in times of uncertainties and emergencies, like discontinuance of work, medical emergencies etc.

One must keep the emergency fund account distinct from the savings account and keep the fund account easily accessible when needed; ensure the fund comprises an amount equivalent to six to twelve months’ worth of living expenses, as it’s usually considered ideal enough to tackle any emergencies or uncertainties if at all life throws the same at you and you find your bearings eventually.

3. Financial Know-How

There is a famous quote, “The day you stop learning, is the day you stop earning”. The world of finance is dynamic in nature, and only the ones who adapt to these changes will be able to navigate them.

Keep yourself educated and financially aware by reading books, taking courses, listening to seasoned market voices, tapping into knowledge resources and keeping track of the emerging trends in the market. The more you invest in skills and education, the more equipped and informed you will be in your financial decision-making.

4. Risk Protection

Ensure that you select the right insurance policies to obtain adequate insurance coverage to protect yourself in times of uncertainty and crisis. Be it health/disability/housing, taking insurance under a good insurance policy can go a long way in protecting against unexpected situations like an ailment that can impact your savings, an unfortunate disability that restricts your ability to work, or damage to property such as a car or a house. Do not forget to review the insurance policies periodically and pay the insurance premium regularly.

5. Use Professional Help

When starting on your financial well-being journey, it would be beneficial to get professional help from those equipped to guide you in this journey. They can help you make a plan considering your income, goals, and liabilities, among others. You can also attend investor education programmes hosted by various investment companies to hear from experts on how to go about forming a strong financial plan.

These are some simple suggestions that, if considered can build a solid foundation for a more stable and financially secure future.

The views expressed in this article are for knowledge/information purpose only and is not a recommendation, offer or solicitation of business or to buy or sell any securities or to adopt any investment strategy. Aditya Birla Sun Life AMC Limited (“ABSLAMC”) /Aditya Birla Sun Life Mutual Fund (“the Fund”) is not guaranteeing/offering/communicating any indicative yield/returns on investments.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.