Personal financial planning for beginners

How to plan your finances if you are a college student or a school goers

For you people your Personal financial planning will consist only 3 things

  1. Your Expenses.
  2. Your Savings.
  3. And make investment of your savings.

I am going to tell you about Individual money management for beginners, here beginners means those who are not earning means those who are in schools and colleges, how you can Personal money planning for yourself, I believe that you guys age is within 17 to 21, and I also believe that you guys are getting pocket money from your parents for daily expenses, When I was in 11 and 12 , my father gives me only 20 rupees for daily expenses, and I go my school by auto rickshaw and it’s cost me 16 rupees for ups and down. It’s mean that I save every day 4 rupees and in months total I save 120 rupees. As we all know that without tuition and coaching, schooling is incomplete so you can save some money over there also. I believe that 4 rupees per day saving is not a hard work at all now a days. I suppose your case is as same as mine, So, here comes Individual finance planning for you. After all your expenses you are able to save 4 rupees in a day and in months just 120. Now it’s time for investing your money for investing you need only 100 rupees per month. Here is the last step of your Individual money planning. You need to download any stock brokerage app like upstox, zerodha etc. personal Favorite upstox because I am using it. After sign up when you get ID password then login in upstox and go to section Invest and click on Mutual funds view all fund and search ICICI PRUDENTIAL NIFTY FIFTY INDEX FUND DIRECT GROWTH Individual money planning You have to invest in it minimum of rupees 100 as I said earlier. Now your money will grow by 12% to 15% per annum and I am assuming that your Personal money management is for your future and assuming that normal life of 80 year and you are investing of next 50 years you can see in below given pic how much money your Personal financial planning made for you. Index fund is very cost effect and investing in index fund you are putting your money on India. So, it is safer to invest by upstox.

One of the way We can plan our personal finance if we are Salary person, self-employed etc.)

For you people your individual money management will consist only 5 things.

  1. Daily expenses fund.
  2. Create fund equivalent of your 6 months salary, for emergency.
  3. Emergency fund for any unwanted circumstance of your family.
  4. Investment of your saving.
  5. Fund for your wants.

As I come from middle class family And I thinks that you are also from middle class family. And I assume that your salary is approximately 25,000 per month, and your age is 25. Now it’s time for Personal money planning for you. First of all, 60% of your salary you should use for your daily expenses. Whatever your salary is. So, I am taking 25000 for explanation, 60% of 25,000 is 15,000 and left fund is 10,000.

Most important of your Individual finance planning is 2nd point because we all know our job is not permanent if we are not government employee. Suppose you lost your job by any reason than is fund will help you at that time. Why six months because I know we can find another job within six months. So, 25000 x 6 = 1,50,000 in your bank account. This will be your first step of Individual money planning. As soon as you can achieve, achieve it first create this fund whatever money left after daily expenses.

After Achieve 2nd point 3rd step of your Personal money management is create fund for Emergency fund for any unwanted circumstance of your family. It should be 15% of your salary if I take above salary 25000 so, 25000 x 15 % = 3750, We should maintain this amount of money from our salary every month.

If you have completed 3rd step of Personal financial planning than it’s time for 4th step of Individual money management. So, lets talk about 4th step in deep, we should always invest 15% to 20% of our salary. As I am assuming that we’re investing 15% of our salary 25000 x 15% = 3750. Now where to invest this money, well we can invest 3 different places

  1. Share Market.
  2. Index fund.
  3. national pension scheme.

I would suggest we should in invest in all 3 places equally that could be best Personal money planning for us. 3750 / 3 = 1250. So, why share market as we all know it’s very risky yes, it is but if we invest for long term in good stock, it will multiply rapidly this can make your money grow very fast. For share market I will write another blog. How to invest were to invest all these.

 Let’s come on index fund this will give you good interest on investment @ of 12% to 15%. And investing in index fund we are investing on India.  You need to download any stock brokerage app like upstox, zerodha etc. personal Favorite upstox because I am using it. After sign up when you get ID password then login in upstox and go to section Invest and click on Mutual funds view all fund and search ICICI PRUDENTIAL NIFTY FIFTY INDEX FUND DIRECT GROWTH. Or any other index fund. See in below pic how much your money will be in your 60es. As per your Individual finance planning.

Let’s talk about national pension scheme. Why this one? Let me tell you why as this scheme name is national pension scheme so it means it will give pension on monthly basis. When your age will be 60 than you can withdraw 40% of Corpus and left 60% of corpus will give you pension for rest of life at age of 100. This Individual money planning is for your retirement.

Last Step of Personal money management is about fund for your want. I am assuming that you have done all the above step so, you deserve 10% of total salary you should use for your want. We all earn for our comfort and happy life. This will motivate us for Personal financial planning.

Have a healthy and wealthy life.

click on upstox for your investment. Have a great journey of your Individual money management.