Skip to content
paisa.io

Financial Planning & Goals - Complete Guide

Master retirement planning, goal setting, emergency funds, and comprehensive financial strategies for life.

Published January 5, 20258 min read

Financial Planning: A One‑Page Operating System

If your money life needs a COO, this is it. A simple, repeatable system beats a perfect spreadsheet. Build the rails, then automate.

The 6‑Bucket OS

  1. Contingency: 6–12 months of expenses. Savings + liquid/ultra‑short debt. Not negotiable.
  2. Protection: Term life (10–15x income), health cover (₹10–20 lakhs family floater), disability cover if available.
  3. Short‑term goals (0–3 yrs): High‑quality debt only—no equity.
  4. Medium‑term goals (3–7 yrs): 20–40% equity, rest debt; rebalance annually.
  5. Long‑term goals (7–15+ yrs): 60–85% equity, 15–35% debt, 5–10% gold.
  6. Aspirational: Fun money 5–10% to avoid raiding core buckets.

Automate SIPs per goal. Rename SIPs with the goal name to reduce temptation to stop during volatility.

Cashflow Design (Pay Yourself First)

  • Day 1–3: Salary hits. Auto‑transfer fixed amounts to contingency and goal SIPs.
  • Day 4–5: Pay credit cards in full, then EMIs, rent, utilities.
  • Step‑up rule: Increase SIPs 8–12% annually—this compounds your contributions even if markets pause.

Goal Templates (Fast Defaults)

  • Child education (15 years): Start 70–80% equity, glide to 20–30% equity by year 12. Use a target‑maturity debt fund for the last 3–5 years.
  • Home down‑payment (5 years): 30–40% equity, 60–70% high‑quality debt. Shift entirely to debt 18–24 months before purchase.
  • Retirement (25–35 years): 70–85% equity early, add PPF/NPS as the debt anchor. Shift 5–10% out of equity each year starting 7 years before retirement.

Annual Review Ritual (90 Minutes That Matter)

  • Rebalance: If any asset deviates by 5% absolute or 25% relative from target, rebalance.
  • Raise SIPs: Align to salary growth. Redirect bonuses to prepay high‑rate debt or top up long‑term goals.
  • Documents: Update nominations, review insurance sum assured, refresh an ICE (in case of emergency) file.

Behavioural Guardrails

  • Two‑week rule: For big money moves, wait 14 days. Most impulses die.
  • Separate apps: Keep trading/speculative apps separate from your long‑term investment platform.
  • Friction saves: Remove UPI pins on credit card spend apps to limit impulse purchases.

Tools