We all work and earn money. Do we manage our hard earned money effectively and efficiently?
New Year is the time to take resolutions. Why don’t you take a resolution to prioritize and organize your personal finance?
Don’t you want to know if you will be able to survive during a financial crisis?
Take the Stress Test and find if your financial portfolio will survive during a crisis.
Here are the 10 commandments of personal finance that can help you in managing your personal financial planning better.
Whether you are just beginning your personal financial planning journey or looking to refine your existing personal financial plan, these principles form the foundation of sound personal financial management for individuals and families alike.
Personal financial planning is the process of setting clear financial goals and building a structured roadmap to achieve them — covering budgeting, saving, investing, insurance, debt management, and retirement planning.
It is not a one-time exercise but an ongoing process that evolves with your life circumstances and financial goals.
The importance of personal financial planning becomes most visible during a crisis — a job loss, a medical emergency, or a market downturn.
Individuals with a structured personal financial plan navigate such situations with far greater confidence than those who manage money reactively.
Research consistently shows that people who engage in deliberate personal financial management accumulate more wealth, carry less debt, and retire more comfortably.
For Indian families specifically, personalized financial planning carries added significance — from navigating tax-saving instruments like PPF, ELSS, and NPS to managing inflation and building a retirement corpus without a universal pension safety net.
Simply put, without a personal financial plan, you are leaving your financial future to chance.
You do not need a higher salary to achieve financial security — you need a better plan.
Here are the 10 principles that form the bedrock of sound personal financial planning for every individual and family.
Most of us hesitate to make a budget because we think it is about cutting all the fun in life.
Budgeting is not about cutting all the fun; it is about conscious allocation of funds.
Once we start spending consciously, our mind will find out a whole new way of having fun within the budget.
You need to create a workable budget that gives you extra money and life.
Financial planning and budgeting go hand in hand — a well-structured budget is the first and most critical step in any personal finance plan, and mastering it is one of the core basics of personal financial management that every individual must develop early.
To save more, obviously you need to spend smarter. To spend smarter, you need to understand your own spending patterns.
Consciously you need to track all your expenses on a daily or weekly basis.
So that you can find out what influences your spending pattern and you can stay away from those influencers.
Effective personal money management starts with tracking personal expenses diligently — this habit is at the core of managing personal finances and is one of the most practical personal finance tips for families looking to build long-term financial stability.
As a bread winner, you provide a lifestyle to your family. This life style need to be protected with sufficient life insurance cover.
Otherwise your family may not be able to continue the same lifestyle in case of any mishappening to you.
A word of caution here, don’t fall prey to ULIP schemes.
Opt instead for a pure term insurance policy.
These policies give you high coverage with low premium.
Also cover yourself and your family members with adequate health insurance .
The coverage amount of the health insurance policy needs to be decided based on your health consciousness, your family health history, and the class of hospital you choose for treatments.
Family protection is a non-negotiable pillar of personal and family financial planning — ensuring adequate life and health coverage is what distinguishes a reactive household financial plan from a truly comprehensive personal financial protection strategy.
Before starting to build fresh wealth, it is our duty to protect our existing assets.
Assets like house, flat, or car can be insured against accident and natural Perils.
The event of earthquake or terrorist attack to our flat/house seems to be remote.
But the impact of such things could change our financial stability upside down.
So protect your house and other major assets with proper insurance.
Personal asset management goes beyond just growing wealth — safeguarding your existing personal assets through adequate insurance is a fundamental aspect of holistic financial planning that is often overlooked in routine financial management at home.
You need to accrue savings for some surprise situations like loss of job, break in job or sudden expenses like a major repair to your car or house.
Generally, the emergency fund needs to be in the range of three to six months’ family expenses.
If you have created this contingency fund, in the event of an emergency you need not pre-close your other investments and thus you avoid paying penalty or booking losses.
Building an emergency reserve is a cornerstone of household financial management and family money management — without it, even the most carefully constructed personal financial plan can unravel under the pressure of an unexpected financial shock.
If you are in debt, you need to create a 11 ways to get out of debt plan with different scenarios.
So that you can find out how some more savings or a different repayment order will help you get out of debt faster.
When creating a plan, you need to choose one which fits your attitude.
Personal debt management is an integral part of individual financial planning — understanding how debt fits into your overall financial plan and aggressively working to eliminate it is one of the 10 principles of financial management that separates financially resilient families from those living pay check to pay check.
If you don’t know where you are going, you may end up somewhere you don’t want to be. Decide your Finacial goals first .
It may be buying a home, buying a car, or children’s higher education.
To get where you want to go in life, it is important to decide in advance how you will get there.
What you need is a roadmap, a financial plan to achieve your financial goals. So create a financial plan for you and your family.
Setting clear financial goals for your family and creating a personalized financial plan around them is what transforms vague intentions into measurable outcomes — this is the essence of financial goal planning and the reason why financial planning for families in India is gaining increasing importance among working households.
A personal wealth organiser for Indian families can be particularly useful at this stage, helping consolidate all financial goals, timelines, and investment instruments into a single structured and actionable personal financial strategy.
In spite of the world wide pension crisis and a growing acceptance that we must plan and save for our retirement, the harsh reality is we are actually not saving enough. Research reports reveal that only 15% of the individuals are saving sufficiently for their retired life.
You can also fall into this 15% category. But how? By saving for your retirement, but there are few things you must do before you retire.
Don’t put off today what you can’t afford to do tomorrow.
If you want to retire early, you can even plan for that, you can even check out our retirement plan calculator.
Do your retirement plan TODAY to have a comfortable and enjoyable retired life.
This can be achieved by following these Doctrines of Retirement Planning, they are essential and also help you in making a wise retirement plan.
Personal finance retirement planning is one of the most neglected areas of individual financial management in India — integrating it early into your personal financial plans ensures that your personal wealth planning efforts compound meaningfully over time, rather than leaving you dependent on insufficient pension provisions in your later years.
You need to check up your financial plan and investments semi-annually so that when there is any deviation from our original plan, you can take corrective measures to control the deviation.
Regular review is what keeps your personal financial planning aligned with your evolving life circumstances — whether it is a change in income, a new family financial goal, or a shift in market conditions, semi-annual reviews are what separate a living, breathing financial plan from one that simply gathers dust.
There is a lot of help available for you online to create a financial plan in various websites with financial calculators.
But if you want to create a complete, comprehensive, customized and workable financial plan, you may seek assistance from professional financial planners.
You really need a professional assistance when you want to review your financial plan and investments, when you want to add a new goal, or when you want to pre pone or postpone one of your goals.
When you choose a financial planner, there are few things you can expect when you first meet him.
If you follow these simple but authentic 10 commandments, by next year you will be richer than what you are this year.
Celebrate the New Year with much more confidence and peace of mind by following these simple steps for success.
What is your opinion on these 10 commandments of personal finance? Do you think applying these commandments will make your personal finance better?
Share your views in the comment section.
To go through these steps systematically by creating a financial plan, we are providing an offer for
Listen to this article Regulated, pure, exchange-traded — and you can actually hold it in…
Listen to this article Chasing a corpus target someone else set for a life you…
Listen to this article For millions of salaried employees in India, retirement is not just…
Listen to this article What if financial freedom did not require working continuously until the…
Listen to this article For many high-net-worth investors, Portfolio Management Services (PMS) carry a certain…
Listen to this article For millions of Indians already struggling with rising living costs, uncertainty…