Many of you may have already started implementing financial planning in your daily lives. However, are you confident that your financial planning adheres to the foundations of a healthy financial plan?
A healthy financial plan is realistic and focused on both current and future well-being.
So, what should you do to achieve a healthy financial plan? Here’s a detailed explanation below.
3 Foundations of a Healthy Financial Plan
- Investment
To have a healthy financial plan, you need to develop the assets you currently hold. The way to do this is through investment.
Asset development can help you achieve more significant financial growth compared to merely keeping assets passively.
There are many types of investments, each with its own risks and objectives, such as stocks, mutual funds, bonds, and gold.
You should first study various types of investments to determine which is most suitable for your needs and current economic conditions.
- Insurance
In addition to developing your assets, it’s important to protect them. One common tool for protecting assets is insurance.
This foundation of financial planning is crucial because there are many uncertainties in the future that we must face.
Insurance provides financial security and serves to protect against various risks such as illness, accidents, death, or natural disasters.
Insurance works by having an individual pay a certain amount of money to a company according to specified terms. If a covered adverse event occurs, the company will provide financial compensation.
- Tax Planning
Paying taxes is an obligation for all Indonesian citizens who meet certain criteria. In a healthy financial plan, you need to understand which taxes you need to pay.
In addition to knowing your tax obligations, you need strategies for tax reduction and managing tax reporting.
Effective tax planning allows you to save by minimizing the tax burden on your financial portfolio.
5 Benefits of a Healthy Financial Plan
- Establishes habits for managing finances
- Helps determine spending priorities
- Achieves short-term and long-term financial goals
- Anticipates unexpected events
- Leads to a more peaceful and prosperous life
5 Tips for Creating a Healthy Financial Plan
- Evaluate Your Current Financial Condition
Before creating a healthy financial plan, you need to understand your current financial situation. Financial condition is more than just income and expenses.
Several factors influence financial condition, including marital status, number of family members, debt, health condition, and age.
You should calculate your net worth by subtracting your liabilities from your assets and income.
- Set Financial Goals
After assessing your current financial position, set realistic financial goals for both the short term and long term.
Clearly and in detail outline your financial goals. This will help you commit to a healthy financial plan.
- Establish a Budget and Spending Plan
Based on the goals you’ve set, it’s time to organize your monthly income. This will facilitate your financial planning.
When setting a budget and spending plan, write down the types of activities and product details needed.
This tip will help you plan your finances more efficiently, avoid wastefulness, and save money for savings or investments.
- Consider Financial Risks
When creating a healthy financial plan, you must be oriented towards the future, which involves uncertainties.
Examples of future risks include job loss, investment loss, health issues, and death. To prepare for these, consider these risks now.
Ways to prepare for potential future risks include having an emergency fund, obtaining insurance, and diversifying investments.
- Start Investing and Preparing an Emergency Fund
The final tip for a healthy financial plan involves investing and preparing an emergency fund. As discussed, your assets need to be developed and protected.
Investment will grow your assets, and insurance will safeguard them. Besides growing assets, investments can also protect them.
One investment instrument that can protect your assets from economic uncertainties is gold. Gold is inflation-resistant and its value generally increases every year.
You can start investing in digital gold with Treasury from just IDR 5,000. Treasury offers ease in investing with minimal initial capital.
You don’t need to worry about storage fees, transaction costs, or security, as Treasury is the first licensed BAPPEBTI digital physical gold trader.
Start creating a healthy financial plan with Treasury today!
