7 financial planning steps you should take for your father

Compute cash-flow statement: The cash-flow statement calculates the income and expenses. This statement shows the savings on hand at the end of every month. These savings can further be utilized in investments. After analyzing the statement your dad can control unnecessary expenses every month. It can be used as a reference to compare flow of cash on a month-on-month basis. Keeping this record handy makes it easier to analyze the financial situation at the end of the year. Suppose your father is not tech savvy then give him a print format to fill details and maintain records. You should add this information in an Excel sheet and compute this statement at the end of every month.
Looking into debt management: Your father would have taken loans at various stages of his life, i.e., home loan, car loan, education loan, etc. You can help him by compiling the equated monthly instalments (EMI) of various loans he is paying. Calculate the time-line to pay off each loan. This gives him a better clue on how much he needs to earn and save to pay off these debts.
Analyze retirement solutions: During his life he would have saved his earnings in various retirement products for a secure retired life. These products would be pension schemes, provident funds, etc. Assist him to know the savings in each instrument till date. Calculate whether these savings are meeting his expenses and goals for a happy retired life. You should consult a professional financial planner for further assistance and advice in retirement planning.
Analyze insurance deeds: The rising inflation nowadays is impacting medical costs. So it's a must to have medical insurance coverage for all family members. Maintain a record of each medical policy with its coverage and premium paying dates, so that he renews the policy on time and it doesn't lapse. Also, analyze the life insurance policy of your dad. If there is short fall in the sum assured then recommend him to increase the sum assurance in this policy while renewing to secure family expenses and pay-off of debts in any unfortunate event.
Maintain a record of investments: It's very common among the older generation to invest the amount in fixed deposits for certain time-frame then forget to withdraw or renew when the term gets over. Also, they don't maintain proper records while investing in equity. Explain the importance of maintaining records of investments and tracking the performance of all investment products. Further, if you have the skills then analyse the investment decisions considering risk appetite and goals. Also, explain the asset allocation and performance of these investment products time to time. Alternately, recommend a financial planner to look into investment planning decisions. They can guide your father to achieve set goals in the prescribe time-frame.
The importance of estate and succession planning: Explain to your father the importance of estate and succession planning by arranging a meeting with a lawyer. This professional would frame an estate and succession plan based on the inputs and recommendations from your father.
Maintain one point of reference: Most fathers in India don't maintain a single one point of reference to preserve important documents like insurance policies, investment records, payment receipts, loans, bank account details, birth certificates, marriage certificate, driving licence, PAN card, tax filing records, etc. So, it's difficult to fetch certain information/documents when required urgently or while filing a tax. You should recommend maintaining a file for each subject area and keep them in a section folder by giving prescribe tags. Following this pattern would keep the documents in organized way.

Also, maintain an emergency diary with important contact details at one place. These contacts must include family members, family doctor, insurance advisor, financial planner, tax consultant, medical stores, nearby hospital, ambulance services, etc. Maintaining these crucial contacts in a diary makes it easier to approach the right person at the right time during critical situations.

Compute cash-flow statement: The cash-flow statement calculates the income and expenses. This statement shows the savings on hand at the end of every month. These savings can further be utilized in investments. After analyzing the statement your dad can control unnecessary expenses every month. It can be used as a reference to compare flow of cash on a month-on-month basis. Keeping this record handy makes it easier to analyze the financial situation at the end of the year. Suppose your father is not tech savvy then give him a print format to fill details and maintain records. You should add this information in an Excel sheet and compute this statement at the end of every month.
Looking into debt management: Your father would have taken loans at various stages of his life, i.e., home loan, car loan, education loan, etc. You can help him by compiling the equated monthly instalments (EMI) of various loans he is paying. Calculate the time-line to pay off each loan. This gives him a better clue on how much he needs to earn and save to pay off these debts.
Analyze retirement solutions: During his life he would have saved his earnings in various retirement products for a secure retired life. These products would be pension schemes, provident funds, etc. Assist him to know the savings in each instrument till date. Calculate whether these savings are meeting his expenses and goals for a happy retired life. You should consult a professional financial planner for further assistance and advice in retirement planning.
Analyze insurance deeds: The rising inflation nowadays is impacting medical costs. So it's a must to have medical insurance coverage for all family members. Maintain a record of each medical policy with its coverage and premium paying dates, so that he renews the policy on time and it doesn't lapse. Also, analyze the life insurance policy of your dad. If there is short fall in the sum assured then recommend him to increase the sum assurance in this policy while renewing to secure family expenses and pay-off of debts in any unfortunate event.
Maintain a record of investments: It's very common among the older generation to invest the amount in fixed deposits for certain time-frame then forget to withdraw or renew when the term gets over. Also, they don't maintain proper records while investing in equity. Explain the importance of maintaining records of investments and tracking the performance of all investment products. Further, if you have the skills then analyse the investment decisions considering risk appetite and goals. Also, explain the asset allocation and performance of these investment products time to time. Alternately, recommend a financial planner to look into investment planning decisions. They can guide your father to achieve set goals in the prescribe time-frame.
The importance of estate and succession planning: Explain to your father the importance of estate and succession planning by arranging a meeting with a lawyer. This professional would frame an estate and succession plan based on the inputs and recommendations from your father.
Maintain one point of reference: Most fathers in India don't maintain a single one point of reference to preserve important documents like insurance policies, investment records, payment receipts, loans, bank account details, birth certificates, marriage certificate, driving licence, PAN card, tax filing records, etc. So, it's difficult to fetch certain information/documents when required urgently or while filing a tax. You should recommend maintaining a file for each subject area and keep them in a section folder by giving prescribe tags. Following this pattern would keep the documents in organized way.

Also, maintain an emergency diary with important contact details at one place. These contacts must include family members, family doctor, insurance advisor, financial planner, tax consultant, medical stores, nearby hospital, ambulance services, etc. Maintaining these crucial contacts in a diary makes it easier to approach the right person at the right time during critical situations.

InvestmentYogi.com is a leading personal finance portal.

Disclaimer: All information in this article has been provided by InvestmentYogi.com and NDTV Profit is not responsible for the accuracy and completeness of the same.