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Like we talked about several ways of building a safety net in the previous image, it is important to know how each one works.
Every options has t be thought of in depth and evaluated before taking any steps.
This video talks about all your options which will help you in making a safety net and also how each one works.
This video is short but effective and doesn't beat around the bush at all.

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There are several ways of making a passive income, just like that there are several ways to creating a safety net. These include eliminating or reducing your debts, creating a sticking to a budget every month and so on.
This picture depicts exactly how you can make a safety net in several ways.

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Financial Planning - Importance of having a financial “safety net” and how savings and budgeting are necessary components of the plan

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Financial Planning - Importance of having a financial “safety net” and how savings and budgeting are necessary components of the plan

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To achieve anything, you should first have a clear GOAL. Goals give you a vision on which to work. Those goals, at the same time, should be clear, achievable and smart. If your goal is unclear, anything you do will not make sense.
This picture tells us what our goals should look like- SMART!

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Once you have a financial plan you need a budget to work with. A budget helps you save enough money to attain the goal you planned.
A budget tells you how much you need to save in a particular time frame, for example a month. Once you decide how much money you have left, you can then divide it between your needs and wants.
This video gives a detailed information as to how to create an effective budget that will help you reach any fianancial goal.

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It is of utmost importance to have a safety net when it comes to financial, because we never know when well need it.
Situations after Covid-19 made this exceptionally necessary.
We shall see in the following post how to do just that.

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As a student its hard to handle your finances on your own. But it is first step towards your independence and one of the most important responsibility.
It is especially har on an international student because along with rent you even have to pay a huge amount of fees.
This video shows a number of ways a student can save and various strategies that might help students spend less and save more.

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Strategies for Saving More and Spending Less for Students

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1.)What did you learn about your topic that surprised you the most?
The most important thing I learned was how to build a safety net and how having a budget can save you from falling in the debt trap.
2. Provide a real-life example of how this topic is relevant or interesting for you.
I am an international student and I have to work out a way for myself to pay my own fees and this matter helped me make a budget for my fees.
3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?
The 50/30/20 rule is very useful if you struggle with understanding budget and savings. It is straight-forward and simple. I would pass this on to anyone needing financial help.

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After having seen and heard a  lot of advices it gets a little confusing on where to start. I was too, but then I heard about this rule and it has been a life savior.
This rule is very simple and effective. You just have to calculate your total income and calculate the ratio out to savings and expenses.
You put out 50% for your needs, 30% for your savings and 20% for wants.
This video explains this at length to make more sense out of it.

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50/30/20 Budgeting Rule and How to Use It

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To make a Safety net the first step is to make a financial plan. A plan starts with noting down everything that you have and earn every month. You can start this by simply making a list of all incoming money on one side of a paper. On the other side of the paper you could right down every expense, or outgoing money. This gives a summary of the cash flow every month.
This website provides a step by step procedure to make a functional financial plan starting from the very basic. It even shows examples and gives templates to make your own financial planner.

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And so we are left wishing we had done some financial planning to pay for the necessities and to cover any of life's unexpected events ... and we'd still have enough left to put towards our goals.

If any of this sounds familiar to you, then you probably don't have a financial plan in place.

At its most basic, a financial plan helps you meet your current financial needs and offers a strategy to achieve future financial stability, so you're able to move forward with your goals.

In this post, you'll learn everything you need to know about financial plans. We'll also share an eight-step process to help you create your own personal financial plan, plus a few templates that can help you save money and time.

Don't wait for someone else to do it. Hire yourself and start calling the shots.

Get Started Free

What is a Financial Plan?

A financial plan is a roadmap for an individual or a company to reach its goals.

It takes into your account your existing financial situation and goals, then creates a detailed strategy based on your prioritized objectives, telling you exactly where to spend your money, and when to save.

Essentially, you can use a financial plan to take control of your money such that you can achieve your goals and ease worries you may have about your wellbeing.

In the past, people had to hire a professional to create a financial planner for them. But with the advancements in technology, you should be able to create one on your own.

It's pretty easy with a financial plan template, which you can modify to reflect your own goals, cash flow, etc. You'll find some handy templates you can use, later in the article.

What is a Personal Financial Plan?

A personal financial plan is a documented analysis of your personal finances, including your earnings, liabilities, assets, and investments.

Its purpose is to help you assess the feasibility of your personal goals and to understand the steps that you will need to take - money-wise - to accomplish them.

Your personal financial plan can stretch over weeks, months or years, based on the estimated completion time of your goals.And you can adjust it at any time to reflect new or changing priorities.

How to Create a Personal Financial Plan in 8 Easy Steps

Making a financial plan could give you more confidence with your cash. Plus, it means fewer nights worrying about those pesky bills.

The trouble is many people don't know where to get started. They worry about things like "how much does a financial plan cost?" and assume they need endless professional support.

The good news? It's never too late (or too early) to start working on your financial plan. Even better - creating a financial plan isn't as complicated as you'd think. You can even break it down into 8 easy steps, like this:

Step 1: Review your current situation

Before you start the actual "planning" part of the process, you need to know where your journey is going to start. That means checking out what your financial situation is like right now.

Honestly, everyone could benefit from investing in more frequent financial checkups, but it's easy to put off looking at your bank statements.

Think about it - when's the last time you actually looked at all of your payments for gas, electricity, broadband, and Netflix, and figured out what they add up to?

Grab your last 6 to 12 months of bank statements and highlight every regular outgoing expense in one color, then highlight your irregular expenses in another.

It might be helpful to categorize these costs into personal and "crucial" expenses. Once you've got all the right info in front of you, ask yourself:

Where can I cut down on spending?

How much could I save by switching to a different service?

Do I really need all of my "optional" expenses?

Step 2: Set short-term and long-term goals

Now you have a starting point for your journey to financial freedom.

The next step is figuring out where you're going. This is an important component in your "financial plan for dummies" journey.

Setting solid goals gives you direction and clarity when making decisions about your finances. Your goals will show you if you're moving in the right direction.

Ideally, you'll need your goals to be S.M.A.R.T. This means they're:

Don't just say you want to have more money in your savings. Write down a statement that explains exactly what you want to accomplish, such as:

"I want to have at least $2,000 in my savings account by the end of next year."

Short-term financial goals, like "I'll put $100 in my savings next month", keep you motivated by showing constant progress. Long-term goals give you a more consistent direction to move in.

Step 3: Create a plan for your debts

No-one likes thinking about debts - but these are issues that you just can't ignore if you want to be financially savvy. Personal financial plans can help.

You can't make huge progress with your short and long-term goals if your interest and repayments are weighing you down. So figure out how to pay what you owe first.

Start by creating a plan to get rid of your most problematic debts. These are the expenses that cost the most due to excessive interest rates and fees. Get rid of those as fast as you can.

If you're struggling to handle several debts at once, it might help to see whether you can consolidate everything into one, cheaper loan.

Step 4: Establish your emergency fund

An emergency fund is like a financial safety blanket.

No matter how "prepared" you think you are, there's always a chance that some unexpected cost will come and sweep you off your feet.

Emergency funds protect you against things like unexpected illness, suddenly losing your job, or even just a bill that you forgot to pay.

While the exact amount of emergency funding you have depends on you, it should generally cover about 3 to 6 months' worth of your fixed expenses. You can also save enough to cover variable expenses like entertainment and food too.

When setting up your personal financial plans, make sure you have an emergency fund in place.

Step 5: Start estate planning

However, it's essential that you think about protecting your family when you're not around. A proper estate plan gives you total peace of mind.

Estate plans include:

This document might also include other clauses for things like final disposition instructions and guardianship nominations.

Estate planning might not be the best thing you can do with your Friday evening fun-wise, but it will ensure that you're protected for anything.

Step 6: Begin investing in your future

The next step is building whatever wealth you already have, so you're prepared for the future. You can begin focusing on your savings and making investments.

You might have different plans to suit your short-term and long-term goals. For instance, your short-term financial plan might cover the steps you're going to take to build wealth now. Your 5-year financial plan might look at things like retirement.

Investing for retirement is one of the best ways to ensure that you're ready to tackle the future. When you begin planning for retirement, you'll need to consider a few variables like:

Desired retirement age: When would you like to stop working (be realistic here)

Desired lifestyle: What kind of lifestyle do you want? Do you want enough cash to do whatever you like? Then plan for that!

Current health: Health is definitely a big contributor to wealth. If you know health problems are likely for you, make sure you're ready to tackle the issue.

Savings rate: How much are you saving towards the future right now?

If you're brand-new to investing, seek out some extra support. There are wealth advisors out there that can introduce you to different kinds of investment accounts and vehicles.

Just as emergency funds protect you from unexpected surprises in life, insurance defends your cash from any unforeseen risks.

Having the right insurance means that you won't need to constantly break into your savings every time something goes wrong. For instance, home insurance means that you're properly protected from things like natural disasters and break-ins.

Car insurance ensures that if anything goes wrong with your car, you're ready to jump in and fix the issue - without massive payments.

Having an emergency fund and making sure you're insured properly means that you can stay on top of all your savings goals - even when the going gets tough.

Make a list of all the insurance you might need when planning financial plan components.

Step 8: Keep track of your plan

The importance of a financial plan is something you can't afford to underestimate.

The more you know about your current financial situation and where you're headed, the more confident you'll be in your spending.

However, getting a financial plan example template and building your own strategy is just the first leg of the journey. You also need to commit to actively tracking your progress.

Check in every three months or so, and make sure you're moving in the right direction. A lot can change in your financial situation within just a few weeks.

Remember to update your plan when significant events occur in your life too. Having a child, getting married, or purchasing a new home will all create new considerations for you to deal with.

Actively reviewing and updating your plan means that you can enjoy a bullet-proof strategy for reaching your financial goals.

Financial Plan Example [Templates]

While you can create a financial plan from scratch, it's always easier and quicker with a template.

Many financial plan template options are available to help you set up a financial plan. All you need to do is enter the details in their fields. You can also edit or remove fields based on the information you have available.

Even if you don't want to use templates, these financial plan examples are a good starting point to learn what real-world plans look like and the specific finances you have to include in the document.

Here are a few templates:

Daily Successful Living offers a simple template you can use to calculate your net worth.

You can do this by adding up your assets and then subtracting all of your liabilities.

Once you have estimated your net worth, you can move onto setting some personal goals.

Smartsheet's free financial plan template lets you create a concise personal finance plan.

Use it to assess your current financial situation, create a strategy to reach your goals, and use the plan to track progress.

You can also include details for estate planning or life insurance if needed.

Simply Stacie's financial planner allows you to lay it all out - month-to-month - to analyze your monthly spending habits compared to what you budgeted.

If you're working towards a goal like, say, saving for retirement, it'll help you find opportunities to cut back and put the money towards your objective.

Financial Plan App Options

Keeping track of your money is difficult, especially when you're unsure of your spending.

Fortunately, there are budget apps you can use to stay on top of your finances.

: Mint, besides its pleasingly minimal UI, offers a good range of money management tools. These are set around a few different areas, namely expense tracking, credit health, and saving advice tailored to your goals.

Pocketnest : Pocketnest teams up with your bank to take you through different themes of financial planning. After you answer a few questions about your financial hitch, the app walks you through each stage of your plan, giving you to-dos along the way to help address any gaps.

: YNAB offers bank syncing, transaction matching, goal tracking, and more. It can help you prepare for the future by breaking up larger expenses into more manageable, bite-sized amounts. The best expenses are ones you can easily manage.

Each of these apps make creating a financial plan a lot more convenient. Being able to view your income, expenditures, investments, etc. at a glance helps you jot down details much faster than gathering information from individual accounts.

Financial plans aren't just for people with high income. Anyone can utilize them to identify their goals and create a plan for achieving them.

If you create a financial plan today, you would be able to work on achieving your life's goals strategically.

It doesn't matter where you stand. The important thing is that you get to fulfill your ambitions while improving your financial stability.

P.S. Life's going to throw you curveballs that can affect your financial situation. Rather than accepting them as your fate, battle through them. You have the most powerful weapon of them all - your financial plan!

Want to Learn More?

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How to Create a Personal Financial Plan (And Reach Your Goals Faster)

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And so we are left wishing we had done some financial planning to pay for the necessities and to cover any of life's unexpected events ... and we'd still have enough left to put towards our goals. If any of this sounds familiar to you, then you probably don't have a financial plan in place.

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When we think of financial planning, retirement pops up in your head but financial planning is not only for retirement.
We can divide it into short term and long term goals and put aside money for each goal as they line up.
May it be paying for the next semester of your course or a vacation you have been meaning to go to, it all requires a calculated plan.
This website talks shortly about how to plan for every type of goal and even gives case studies to understand every type of financial plans ranging from retirement of a after-graduation scenario.

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Your financial needs and goals are not a fixed destination-they will change through your life. Yet they remain key to financial planning. When you know what goals you want to work toward, you can take the steps that will move you forward, and you'll be in a stronger position to achieve the next goal you choose. And with a plan, you can reduce distractions and expensive wrong directions.

Consider the cases below:

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Your financial needs and goals are not a fixed destination-they will change through your life. Yet they remain key to financial planning. When you know what goals you want to work toward, you can take the steps that will move you forward, and you'll be in a stronger position to achieve the next goal you choose.

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Applications and Websites to help you do that..

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Applications and Websites to help you do that..

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Making a financial plan is hard and you could use every help you could get to make it as simple as possible.
There are a ton of websites and applications to help you with that but we can not use any and every. It is a very important step towards your financial growth and hence you need trusted websites and applications for that.
This website lists 10 most trusted and simple application that you can use to help you with your planning needs.

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Budget App #1. You Need a Budget

Best for: Committed budgeters who want granular control of their money.

You Need a Budget is a very popular budget app with a die-hard following who lovingly call it, "YNAB."

This budgeting app claims that on average, new budgeters save $600 in the first two months of using the app, and more than $6,000 in the first year." Not bad, right?

You Need a Budget is an advocate of the zero-sum budgeting strategy. The idea is to "give every dollar a job." This way, you'll spend every dollar intentionally and won't fritter money away on unimportant purchases.

This budget tracker allows you to connect all of your accounts to one money management dashboard. You can access this dashboard on mobile or desktop.

It's great for individuals and couples who want to set savings goals and manage a budget together.

Plus, it has a dedicated feature to help you pay down your debt. This budget tool teaches you to manage your debt effectively and how to save money mindfully. It allows you to set attainable targets to help you feel good about tackling big, scary debts.

Pricing: 'You Need a Budget' offers a 34-day free trial. This budget app costs $11.99 per month or $84 per year.

Budget App #2. Mint

Best for: All-round money management.

Mint is an established, well-known budget app. It's made by Intuit, the maker of the finance software programs Quickbooks and TurboTax.

Mint provides a range of budget tools and features to help you manage your finances. You can use it to set money goals, track your progress, and get advice on personal finances.

In short, this budget app makes it easy to get a complete picture of your financial situation.

It has a massive list of banks, credit cards, lenders, and brokerages that you can connect to your account. This allows you to see all of your transactions, account balances, and net worth in one place.

This free budget app automatically categorizes your transactions. As a result, it's very easy to track spending by category and compare it to your budget. Additionally, Mint will send you bill alerts and notify you when you spend too much money or go over budget.

Mint also allows you to "enjoy access to unlimited free credit scores, without harming your credit."

Plus, Mint will notify you when your credit score changes and sends you fraud alerts.

Pricing: Mint is free to use. (The company makes money by recommending related financial services from third-parties, such as credit cards or mortgage loans.)

Budget App #3. EveryDollar

Best for: Those in need of a complete personal finance solution, including budget apps, finance tools, and resources.

EveryDollar is a budget tool from best-selling finance writer and author Dave Ramsey.

Ramsey doesn't pull any punches when it comes to managing money, paying off debt, and saving for retirement. And this budget tool is designed to help you implement his advice.

EveryDollar helps you create and manage a zero-sum budget - where you "tell every dollar where to go." In Ramsey's words:
If you cover all your expenses during the month and have $500 left over, you aren't done with the budget yet. You must tell that 500 bucks where to go. If you don't, you lose the chance to make it work for you in the areas of getting out of debt, saving for an emergency, investing, paying off the house, or growing wealth."
The free version of this budgeting software allows you to create a budget and add transactions each time you make a purchase.

The premium version of the app offers a far more streamlined process. You can connect your bank accounts to the app and automate your budget.

Plus, the premium option also provides access to other budget tools, apps, and resources to help you take control of your money.

Pricing: Free accounts with limited features are available. Alternatively, you can sign up for a Ramsey+ Membership, which costs $129.99/year and includes a personal finance course, budget app EveryDollar, and the BabySteps app.

Budget App #4. PocketGuard

Best for: Helping you stick to your budget and avoid overspending.

PocketGuard users rate this app as the best budget tool to create custom budget and track purchases. You can use this free budget app to set budgets and track your spending throughout the month.

You can also set unlimited financial targets and track your progress as you move closer to your goals. This budgeting software also has an autosave feature that allows you to create automatic rules to make saving easier.

It allows you to link all of your accounts and provides an overview of your finances at a glance. Then you can keep a close watch on your debt payments, how much you earn, your net worth, and your expenses.

Plus, PocketGuard uses algorithms to identify ways you can lower your spending. It keeps a close eye on recurring household bills and helps you find better deals to save money. It even simplifies the process of canceling subscriptions to services you no longer need.

This simple budget app will send you smart bill reminders to make sure that you never miss a due date again.

Pricing: Free accounts are available, or you can sign up for PocketGuard Plus for $3.99/month or $34.99/year.

Budget App #5. Mvelopes

Best for: Using the cash-style envelope budgeting method.

Mvelopes is a budget app based on the concept of envelope budgeting. This is when you would put all of your money into separate envelopes for different spending categories. When an envelope is empty, you've spent your budget for that category and will need to wait until next month to refill the envelope.

Envelope budgeting is a tried and tested method. However, it's much more difficult to do when most payments are made digitally from the same account. Mvelopes solves this issue. This great budgeting app allows you to break down your budget into unlimited virtual envelopes.

You can also connect unlimited financial accounts to the app and track your balances alongside your budget to increase your savings and pay off debt faster. You can assign transactions to different spending categories and split individual transactions into separate groups.

This super simple budget app makes it easy to make informed decisions and manage your budget on-the-go.

The budget tool also provides resources within the app to help you learn more about personal finance management, such as saving tips, ebooks, and videos.

Pricing: Mvelopes has a 60-day free trial. Then plans cost $6/month for Basic, $9.95/month for Premier, and $19/month for Plus.

Budget App #6. Goodbudget

Best for: Couples who want to to manage finances together.

Goodbudget (previously known as Easy Envelope Budget Aid) is a free budget app that makes it easy for couples, friends, or family members to create a budget and manage their finances. Individuals can also use this budget tracker.

Goodbudget is based on the envelope budgeting method, just like Mvelopes. You can use this budget tool to create and track multiple spending categories using the apps virtual "envelopes." For example, you can create separate envelopes for rent, utilities, eating out, and fun. This can make it easier to track your spending and identify opportunities to reduce your outgoings.

You can add up to 10 "envelopes" using a free account or upgrade to a paid membership to access unlimited envelopes and other features.

This is one of the best budget apps to help you gain control over your money with in-app reports that help you understand how to modify your budget.

Pricing: Goodbudget provides a free account and a Plus account for $7/month or $60/year.

Budget App #7. Clarity Money

Best for: Automated money management.

Clarity Money is a comprehensive free budget app that was recently purchased by Wall Street giant Goldman Sachs. It uses artificial intelligence to analyze your finances and help you make smart financial decisions.

This best free budget app has an intuitive dashboard that makes it simple to understand your financial situation at a glance.

You can link accounts from thousands of financial institutions, create a budget, track spending, and monitor your debt. Simply organize your spending into different categories, set goals, and monitor your progress. The app will even automate your expense tracking and savings.

What's more, there are features to help you manage subscriptions and monitor your credit score.

Pricing: This great budgeting app is free of charge. (The company makes money from promoting other financial services within the app.)

Budget App #8. Wally

Best for: Managing multiple currencies, for global travellers, or those living outside of the U.S.

Wally is one of the top budget apps out there. It helps you to track your income and expenses, set a budget, and keep from overspending.

One of Wally's key features is its ability to handle international money management. According to Wally's website, you can add financial accounts from more than 15,000 institutions in 70 countries and manage your money in 60 currencies. This makes Wally the ideal choice for digital nomads and those living outside the U.S.

You can set monthly goals, analyze your spending habits, and adjust your budget as you go.

Pricing: Wally provides a free plan. Alternatively, upgrade to Wally Gold to access more features for $24.99/year or $1.99/month.

Budget App #9. Simple

Best for: Banking and budgeting in one app.

Simple isn't just a budget tool - it's also an online checking account with tons of features. Combining your main bank account and a budgeting app makes it simple to manage your money.

The Simple budget app allows you to track your income and spending automatically. You can also set goals and monitor your progress to help you save.

Simple is a free service with no hidden bank fees, and it comes with a free Visa debit card. The app also allows you to link external accounts, take photos of checks to deposit them into your bank account, and use payment services like Square, PayPal, and Venmo.

Pricing: Free

Budget App #10. Personal Capital

Best for: Best for retirement and investment-focused budgeters.

Personal Capital isn't just a budget app - it's also a wealth management tool. This budgeting software allows you to track and manage all of your accounts in one place, including bank accounts, credit cards, debts, stocks, and retirement funds.

You can also hone your retirement strategy with the Retirement Planner budget tool or by talking with a financial advisor through the app.

Personal Capital's free budgeting software is geared toward managing investments. It automatically analyzes your asset classes, investment fees, and other details to help you find ways to improve your financial management.

The budgeting tool in this app isn't as comprehensive as some of the other apps on the list. However, Personal Capital will automatically track purchases from your linked accounts.

Pricing: Free

Summary: Our Best Budget Apps in 2020

If you want to take control of your finances, pay off debt, and save more, a budget app can help. In summary, here are 10 of the top budget apps in 2020:

1. You Need a Budget: Hands-on budgeting

2. Mint: Simple money management

3. EveryDollar: A complete personal finance solution

4. PocketGuard: Avoid overspending

5. Mvelopes: Cash-style envelope budgeting

6. Goodbudget: Ideal for couples to budget together

7. Clarity Money: Automated money management

8. Wally: Works with multiple currencies and countries

9. Simple: Banking and budgeting in one app

10. Personal Capital: Investment-focused budget app

Using a budget app may feel overwhelming and complicated at first, but persevere. Once you're up and running, they can make managing your finances much easier.

Want to Learn More?

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10 Best Budget Apps: Budgeting Apps For Financial Freedom

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Best for: Committed budgeters who want granular control of their money. You Need a Budget is a very popular budget app with a die-hard following who lovingly call it, "YNAB." This budgeting app claims that on average, new budgeters save $600 in the first two months of using the app, and more than $6,000 in the first year."

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The first step to take in the maze of financial planning if you are a new-bee to this is to talk to someone experienced and someone who gives a right, calculated advise.
You will see a lot of people giving you advices but not all know what they are talking about. A financial advisor studies your finances in particular and makes a plan which is specific to you and your finance. They have the knowledge and experience to provide you a plan which will work perfectly for you and you alone.
This website talks about the content and services provided by a financial advisor which is personalized for your financial needs

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Learn how to make a financial plan | Scotiabank Canada

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Learn to make your own smart financial plan. Our Advice+ centre can help you achieve your financial goals and dreams.