Understanding the ‘Do It Yourself’ technique
No matter whether you are working out, dieting, curing any of your simple health issues, constructing your house, or considering money management – all these have two approaches to get them done, either seeking professional help or doing on your own. The decision to go for professional help depends on several factors that may vary from person to person.
Let us consider the example of building a house. For the same, one may decide to hire a personal architect depending upon his budget, the project size, as well as the kind of interior requirements. Otherwise, one can just go for a local contractor briefing, and take the supervision of the construction on his shoulders.
Planning one’s finances is no rocket science that you cannot do on your own. This process is a not so difficult combination of some simple financial strategies, minor calculations, but most importantly a lot of discipline.
Although, you may not have a well-written plan and a second opinion from a professional financial planner, however one can still do it well if you are self-motivated as well as truly disciplined to take charge of all your money on your own.
The following factors given below, if in your favor, will also help you in the same process.
Understanding of the present and future value of money is a requisite for the ‘do-it-yourself’ financial planning technique. There are certain questions one needs to answer on his own. These questions may include knowing about how much corpus should one require to retire comfortably. Additionally, it will also be beneficial to know about the various tax benefits, his savings as well as expenditures. Thereafter, one must know about the impact of inflation on one’s finances. Other queries may include considering an understanding about investments in equity markets.
This comprehension is at present available abundantly on print, television and online media. These questions are not very difficult to answer, if one is able to take out sufficient amount of time from his work schedule and has an inclination to go for the same.
For successful money management, time is one very important thing that one needs to commit. One needs to begin by acquiring knowledge over personal financial matters as well as products. The various ways of doing so are by the financial sections of the daily newspaper, television, and internet. There is a plethora of information available all around.
All one need to do is to get used to the terminologies and the various products available on banking, insurance, investments, etc. Thereafter, one also needs to put in sufficient time for knowing about his requirements, setting financial goals, comparing products, learning to use financial calculators, taking decisions and executing it.
Getting a hold over your money is an on-going process that does not happen overnight, but requires a regular commitment.
For those unable to make such commitments can always go for hiring a financial planner, who does all the handholding, advising and executing of the plan. So you spend only a less time in meeting the planner and understanding, executing, and reviewing the plan.
This huge factor at present may become non-existent after some years. As of now, our country has less ‘Certified Financial Planners’ and only very less out of those seem to be practicing. This small number is however observant in bigger cities. With rising consumer demand, the situation seems to be observing quick changes.
Therefore, if you find a qualified as well as practicing Financial Planner available, who is also offering you requisite services, you might think to hire him. While doing so, one must check on his references, fees structure, background and things like that.
Experienced and professional financial planners may be an expensive choice. One’s willingness to spend is a choice that is entirely dependent upon him. However, you can quantify your ability to pay to a certain extent. One’s affordability is a simple adjustment, i.e. one pays to save upon his precious time, efforts and get the right professional advice. However, one must also not let this become the only deciding factor.
Last but not the least; one should also consider the complications involved in your financial affairs to be an important decision-maker. Evaluating factors like your income sources (single or multiple), your current portfolio spread out (as in mutual funds, stocks, insurance policies, etc.) will give you an idea whether you need a professional help or can take the charge yourself.
If in an ad-hoc situation, look for an expert planner’s help, who may give you a holistic view and help bring harmony to your investments mapping them to future goals.
Alternatively, if things go simple try the ‘Do-it-yourself’ approach first, before going for some external assistance. Important thing is to start somewhere, and take primary steps towards having your plan in place.
Implementing this technique to Financial Planning
After analyzing the factors mentioned above, one may make a decision to try doing on his own or going for a financial planner’s help.