Posted on May 23, 2021 at 10:06 pm

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Simplify Financial Planning for the Future with 8 Steps

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Most people begin financial planning when they start earning and moving towards financial independence. It is necessary to inculcate a habit of saving and investing as early as possible to make your family financially strong and capable of fighting the unexpected events you might face. Today, you can easily estimate the cost of different types of insurance using an insurance calculator online. Let’s take a look at some of the advantages of early investment in life include:

  1. You’ll be able to take risks, which will ultimately result in better returns later
  2. The time value of money increases with compounding returns
  3. You can support your retirement plans
  4. You can prepare well for a financially secured future
  5. You develop the habit of disciplined savings
  6. You can also avail tax benefits

With any plan, there’s a step-wise process to execute it, and so is the case with financial planning. It can also help to choose an appropriate plan from different types of insurance policies available. 

Find below a few steps to simplify financial planning for the future and calculate the coverage using an insurance calculator.

  • Project Future Financial Needs and Set a Budget

Everyone has different goals to achieve in life, which may belong, medium or short-term goals. It is crucial to work out the cost you will have to incur to achieve those goals while keeping the impact of inflation in mind. 

The same amount which fulfills a particular need today might not be sufficient after a few years. So, you need to work out a budget accordingly. After making these calculations, you will get an idea of the amount you require to accomplish your goals.

 

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Photo by Sharon McCutcheon on Unsplash
  • Create Emergency Funds

It is always a good idea to set aside your savings to fight emergencies and uncertainties. It is necessary to maintain such a corpus to be well prepared against any situation. Reviewing your budget every few months can be helpful so that that you can make adjustments accordingly. 

  • Invest In An Appropriate Insurance Policy

Amongst various types of insurance policy available, you should make sure that you invest in an insurance policy that suits your needs. Setting aside an emergency fund without a systematic plan may not sufficiently cover the unforeseeable events in the future. A suitable life insurance policy can keep your family financially secured and prepared for difficult times appropriately. 

With the increasing lifestyle diseases, investment in life insurance has become imperative and should be a part of your financial planning. You can easily calculate the premium amount by pay using an investment calculator. 

  • Pay Off High-Interest Debt First

You should prioritize paying off high-interest debt to save the interest amount you pay at regular intervals with your debt amount. Remember to pay them without any delays to avoid any additional payments and issues later.

  • Consider the Significant Upcoming Expenses

Though there are several expenses that are unpredictable, you can certainly predict a few of them. For instance, the down payment of the new house, your child’s higher education expenses, etc. You are aware of such expenses well in advance and should consider these while preparing your financial plan.

  • Asset Allocation is the Key

Investing in funds such as debt, equity, etc., can produce satisfying returns in the long term. For solving the dual purpose of life coverage and asset allocation, you can opt for a suitable ULIP plan. 

You get the benefit of earning returns over a period of time on market-linked securities along with life coverage. This can also be used for retirement planning. Use an insurance calculator to make near to accurate calculations. 


Image Source: Shutterstock

  • Calculate the Premium Amount Using an Insurance Calculator

After the steps mentioned above, you must be eager to know the payable premium amount. Well, it varies from individual to individual depending on their needs, financial goals, earnings, regular expenses, etc. 

You can calculate the premium amount using a life insurance premium calculator based on the plan you choose. By just entering the necessary details, you can easily calculate the accurate premium amount that you will have to pay using an insurance calculator available across various websites.

  • Compare and Buy 

Before choosing any investment plan, you should compare the policies across various insurance providers to invest in the best plan and get maximum benefits.

There are various bases to compare, such as interest amount, premium amount, benefits, associated charges, etc. After you’ve made a fair comparison, you should also look at their specifications, terms and policies, claim settlement ratio, etc. These are necessary things to check before you buy any insurance plan to get your claim and benefits well in time whenever required. 

If you have not begun investing your money, it is never too late. You can start the process of financial planning right from today. But, it is important to plan and make calculations in the right manner. Insurance providers like Max life Insurance provide you with end-to-end assistance and help you choose the best plan depending on your requirements and investment goals, along with enabling you to save on tax!

Invest wisely to secure your future!

Sources:

https://www.incometaxindia.gov.in/Pages/tools/deduction-under-section-80c.aspx

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