Financial Management & Planning – Budgeting, investments, and fund flow.

Financial Management & Planning Module Budgeting – Investments – Fund Flow Management
This module is structured into 5 stages, each with clear steps, worksheets, and decision rules.

Stage 1: Assess Your Financial Position
Goal: Understand where you stand financially.
Inputs needed
• Monthly take-home income
• All expenses (fixed + variable)
• Existing savings
• Loan EMI / liabilities
• Assets (bank balance, gold, property, investments)
Tools
✔️ Net Worth Sheet
✔️ Income–Expense Tracker
✔️ Bank statement (3–6 months)
Output
• Net worth = Assets – Liabilities
• Monthly financial surplus or deficit

Stage 2: Budget Planning (50–30–20 or Custom Ratio)
Goal: Create a monthly plan that controls spending and increases savings.
Standard Budget Rule (beginner-friendly)
• 50% Needs (Rent, groceries, EMIs, utilities)
• 30% Wants (Dining out, entertainment)
• 20% Savings/Investments
Alternative: Zero-Based Budget
Every rupee is assigned a purpose → Income – Allocation = 0
Steps
1. Categorize monthly expenses.
2. Set limits for each category.
3. Automate payments (EMI, SIP, insurance).
4. Review weekly or monthly.
Output
• A clear monthly budget sheet
• Defined saving capacity

Stage 3: Build Your Financial Safety Net
Goal: Protect from unexpected risks.
Emergency Fund
• 3–6 months of expenses (salaried)
• 6–12 months (self-employed)
Where to keep it:
• 50% in high-interest savings account
• 50% in liquid mutual funds
Essential Insurance
• Term insurance (10–15× annual income)
• Health insurance (₹5–20L depending on city/family)
• Vehicle insurance (if applicable)
Output
• Emergency fund target & progress
• Insurance checklist completed

Stage 4: Investment Planning (based on risk profile)
Goal: Grow wealth strategically.