financial management

Most important part of any individual’s life is the financial safety and security. it is important to have a financial plan to tide over tough times in life. it is not only important to earn well and save well, but it is equally important to invest well so that financial future can be secured.
following are the 5 financial management steps to secure financial future.




Every individual has unique needs and requirements for planning for financial independence. like medicine, one plan can’t suit all. it will depend on days left for retirement, earnings/savings capacity, dependents, financial literacy. either one needs to read a lot to have DIY financial planning, or, a better option is to consult a paid financial planner.

     2.   RISK.

Most important part of a financial management is directly related to risk. for example, if retirement is nearer, one is discouraged to go heavily into equities. same way, if there are many numbers of dependents, then it affects the way Financial Management is done.


Goals will dictate ones action for having a unique financial plan. for example, how far or nearer the financial goal is, like kids going to college, or buying a car. the goals may further be divided into short term, mid term or long term financial goals. for example, retirement is a long term financial goal, buying a car could be a short term or medium term financial goal.


What are the means available with one to achieve the financial security? if the income is not sufficient then may be some passive means of income generation may be used. Another way could be a reduction of expenditure, if possible.


The last part of the financial management is the end or freedom. it also involves many steps to be taken, like just before coming close to retirement, re-balancing the portfolio, may be, shifting from equity to debt. switching over to less risky financial avenues.