7 Must-Follow Investing Plan in stock market for beginners

Welcoming a new year is a great chance to plan for the coming year. This exciting time can inspire you to look forward to what's next. So, this article will help you create possible financial goals for 2024.

These money-related promises help set up your financial management project. Their effect will last through 2024 and beyond, improving your economic base for many years. Developing these money habits now will shape your future financial path and encourage financial responsibility.

Also Read: Risk Management Definition and Examples

Introduction to financial planning

Financial planning is a process to reach your life goals. It's like a roadmap for your life journey. It helps you control your earnings, spending, and investments so you can handle your money and reach your targets.

1- Budgeting & Savings

Start your financial planning with budgeting. It helps you split your income into costs, savings, and investments. Begin the year by creating a detailed budget that outlines your income, expenses, and savings goals. Understanding your financial situation undoubtedly will help you make smart decisions and prioritise your spending.

Start with the 50/30/20 budgeting method like this:

• Put 50%  towards essential expenses like food, clothes, rent, loan payments, medicine, children's fees, and utility bills.

• Use 30% of your money for wants or optional costs like dining out, movies, entertainment, subscriptions, holidays, and so on.

• Put 20% of your income into savings and investments. This money can assist in emergencies, provide life and health insurance, fund your child's education and wedding, support retirement, cover a house down payment, repay a home loan, or kick start a business.

2- Build an Emergency Fund

Establish or boost your emergency fund. Aim to save three to six months' worth of living expenses in a liquid and easily accessible account. This fund acts as a safety net during unexpected financial challenges, providing peace of mind and financial security.

3- Start To Investing Wisely

Check and improve your investment collection. Make sure it matches your comfort with risk, money goals, and timeline. Think about getting help from finance experts to make smart choices and spread out your investments for future growth.

4- Debt Management

Make a plan to handle and lower your debt. Focus on debts with high-interest rates first and look into combining them or changing their terms. Make a plan to steadily pay off what you owe, which will free up money for future financial goals.

Also Read: What Is Debt-to-Equity Ratio?

5- Enhance Financial Literacy

Understand about personal finance. Keep up with investment methods, tax effects, and financial planning. The more you know, the better you can make good money choices.

6- Retirement Planning

Check your retirement savings and adjust if necessary. Think about adding more to your retirement accounts, using your employer's matching contributions, and looking into other savings options for retirement. Start planning for a relaxing retirement as soon as possible.

7- Set and Monitor Financial Goals

Set short-term and long-term money goals. These could be buying a house, starting a business, or saving for school. 

Also Read: Return on Equity (ROE) Calculation

Keep in mind that the secret to good financial planning is being steady and flexible. Frequently check your financial plan, monitor your spending, and change things as your life changes. By doing this, you can aim for a safer and wealthier financial future in 2024 and onwards.