Financial Planning Process

• Review your income, expenses, savings, debts, and assets.
• Track your spending habits to ensure you're living within your means.
• Identify areas for improvement and opportunities for saving or investing.

• Allocate income towards necessary expenses, savings, and investments.
• Track and monitor your spending regularly to avoid overspending.
• Prioritize needs over wants, and cut back on unnecessary expenses.

• Save 3-6 months' worth of living expenses in a liquid, accessible account.
• Use the emergency fund to cover unexpected events (job loss, medical emergencies).
• Avoid using this fund for non-urgent expenses to maintain financial security.

• Begin contributing to retirement accounts (401(k), pension plans, etc.).
• Invest in diversified assets like stocks, bonds, and mutual funds to grow wealth.
• Start early to take advantage of compound interest and maximize returns.

• Purchase life insurance and disability insurance to protect against unforeseen circumstances.
• Develop an estate plan (wills, trusts) to ensure your assets are distributed as per your wishes.
• Regularly review and update insurance and estate plans to keep them aligned with your changing needs.

The 50-20-30 Rule is a budgeting guideline that divides your income into three categories:

1. 50% for Needs: Essentials like housing, utilities, groceries, and transportation.
2. 20% for Savings and Investments: Contributions to retirement savings, emergency fund, and investments.
3. 30% for Debt Payment & Wants: Discretionary spending on entertainment, dining,  leisure, and paying off debt.
4. Flexibility: Adjust the percentages based on your needs and goals; regularly review your budget for balance and alignment with your financial situation.