By Dipesh Ghimire
Building Your Own Financial Plan: A Complete Guide
Article By : Dipesh Ghimire
Managing money wisely has become one of the most important skills in today’s unpredictable world. A financial plan is essentially your personal roadmap that shows how to balance spending, saving, debt repayment, and investments in order to meet both immediate needs and long-term ambitions.
Unlike a simple budget or a list of numbers, a financial plan connects your current reality with your future goals. Whether you’re a student just starting to earn, a salaried professional, or even running a small business, the steps remain surprisingly similar.
Step 1: Understand Where You Stand
Before moving forward, you need a clear picture of your present financial situation. Write down:
Income sources: salary, business profits, freelance projects, rent, dividends.
Essential expenses: housing, utilities, loan installments, insurance.
Flexible expenses: food, shopping, travel, entertainment.
Assets: cash, savings accounts, properties, investments.
Liabilities: personal loans, credit card balances, pending EMIs.
Tip: Using a budgeting app or a simple spreadsheet makes tracking much easier. Without this foundation, no financial plan can truly work.
Step 2: Define Goals That Matter
Money without purpose is easily wasted. Decide what you want it to achieve—whether that’s buying a home, building an emergency cushion, or retiring comfortably. Make sure your goals are specific and measurable.
Example: Instead of saying “I want to save more”, say “I want ₹600,000 for a home down payment within three years.”
Example: “I want an emergency fund equal to six months of expenses within one year.”
Clear goals keep you motivated and make it easier to measure progress.
Step 3: Create a Practical Budget
A budget is your monthly action plan. One widely used method is the 50/30/20 rule:
50% of income for essentials (rent, bills, food).
30% for lifestyle wants (restaurants, hobbies, shopping).
20% for savings and investments.
Remember, a budget should not feel like punishment—it’s a tool for balance. Automating your savings helps remove temptation and keeps you disciplined without effort.
Step 4: Build a Safety Net
Life is unpredictable. Losing a job, sudden medical bills, or urgent repairs can happen anytime. An emergency fund acts as your shield.
Target: Save three to six months of living expenses.
Where to keep it: in a high-interest savings account or a liquid fund that you can access quickly.
This cushion prevents you from falling into debt during difficult times.
Step 5: Tackle Debt Strategically
Not all debt is harmful, but high-interest debt (like credit cards) can drain your finances. Tackle it with a method that suits you:
Avalanche method: Pay off the loan with the highest interest first.
Snowball method: Clear the smallest loan first to build motivation.
Every rupee you save on interest becomes extra capital you can put into wealth-building investments.
Step 6: Make Your Money Grow
Savings alone can’t fight inflation. Investing helps your money work for you. Match your investment choices with your time horizon and risk tolerance:
Short-term goals (1–3 years): keep money safe in liquid funds or fixed deposits.
Medium-term (3–5 years): balanced or hybrid funds, government bonds.
Long-term (5+ years): equity mutual funds, index funds, stocks, or real estate.
The golden rule: never chase returns blindly. Always consider the risks before investing.
Step 7: Review and Adjust Regularly
A financial plan is a living document. Review it twice a year or whenever life circumstances change—new job, marriage, having children, or receiving an inheritance. What worked last year might not fit today, so flexibility is essential.
For Beginners: Start Small, Stay Consistent
If you’re new to financial planning, it doesn’t have to feel overwhelming. Start with small, manageable actions:
Track every expense for a month.
Set one simple goal—like saving ₹5,000 in two months.
Open a separate account for that goal.
Learn one new financial concept each week (for example, mutual funds or PPF).
Celebrate small milestones—reward yourself modestly when you achieve a target.
Good financial habits are built step by step.
Why This Matters Today
With rising living costs, volatile markets, and uncertain job stability, a financial plan is no longer optional—it’s essential. For households in Nepal and beyond, having a structured money strategy can mean the difference between financial stress and financial security.
The truth is simple: you don’t need to be rich or a finance expert to start planning. You only need clarity, discipline, and the willingness to take the first step.
Final Thought: The best time to create your financial plan was yesterday. The next best time is today.
About the Author : Dipesh Ghimire, a journalist focused on Nepal’s economy, has over 15 years of experience in the share market.
