Six Steps That Will Help You Reach Your Financial Goals

A smooth financial plan is one that caters to your needs and life goals. Here are six steps that financial planners take to ensure there are no gaps
Six Steps That Will Help You Reach Your Financial Goals

Goal-setting is an important exercise in financial planning. Apart from helping you plan well for your financial goals, it can also give clarity on how you want your life to look like in the future.

“Basically, financial planning is a blueprint of your financial goals. Almost all such plans include your life and financial goals, an analysis of the current finances, and an outline of how you would accomplish the goals you’ve set,” says Renu Maheshwari, chief executive officer and principal advisor, Finzscholarz Wealth Manager and a Sebi-registered investment advisor.

While some prefer doing it themselves, if you don’t have the time or the required knowhow, it is advisable to approach a Sebi-registered investment advisor who can understand your needs and tailor your portfolio accordingly.

Here are some of the steps that planners help you take. These involve assessing your need and making make room for them by channelising your expenses and investments accordingly.


Budgeting is an important aspect of financial planning. It helps a planner determine where the money is going and where you can cut back to meet your goals. A budget calculator can help you assess whether your money is getting spent on unnecessary things. It helps you to allocate your funds to different categories.

When you are listing down your expenses, you must separate it into two baskets. The first for discretionary costs such as groceries and rent, and the second for non-discretionary costs such as a gym membership or dining out.

Managing Liquidity

A major component of financial planning is liquidity management. In this case, a certain amount of money is kept aside for unforeseen events. “When you keep money aside for your short-term unexpected needs such as repairing a house, a medical emergency, or buying a gift for a relative or a friend for a sudden event, you end up saving yourself from a credit card debt-trap,” says Maheshwari.

Financing Large Purchases

We all have to make those large purchases in our lifetimes, like buying a house, a car, investing in college education, wedding shopping, among others. A lot of these purchases involve borrowing because of the high cost. In some cases, people fully or partly fund the purchase on their own.

“When you are saving for large purchases, you need to deploy your money in such a way, that it gives you a higher rate of return than a regular savings account,” adds Maheshwari.

Managing Your Risk

This is an essential part of financial planning. An optimum financial plan makes room for eventualities. It considers some key questions. What will happen if you are no longer able to work or perform your duties due to medical condition? What if you lose your job and are unable to find another for the next few months? A plan encourages you to keep aside emergency funds to manage potential risks to the earnings of the family.

Investing Your Money

This is one of the key responsibilities that financial planners provide to their clients. There are different ways to invest your surplus funds or income. Each of such ways have different tax implications or risk and return characteristics. Financial planners helps assess your needs and suggest suitable instruments that can fulfil those.

“Tax management is an essential strategy to protect your investment returns. There are several tax-reduction methods and strategies for wealth creation and tax-free income,” says Maheshwari.

Long-term goals such as retirement can be catered to with planned investing.

With the help of a financial planner, you also need to evaluate transfer of your wealth to your heirs.

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