A financial plan that fits on one page

A financial plan is not a spreadsheet with forty tabs. It is a short, ordered list of decisions, each of which has to be made before the next one is worth making. Done in the wrong order, good individual decisions still produce a fragile position.

1. Know what you spend

Not a budget — just a number. Three months of bank and card statements, sorted into committed spending (rent, EMIs, groceries, utilities, fees, insurance) and everything else. The committed figure is the one every later step depends on.

Most people are surprised by it, usually upwards.

2. Build the buffer

Three to twelve months of committed spending, depending on how steady your income is. Three months for two salaried incomes in the household, six for one, nine or more for business and commission income.

Keep it split between a sweep-in savings account and a liquid fund. Returns are irrelevant here; availability is the whole point. Size it against your actual commitments rather than a round figure.

This step comes before investing, not after. A SIP started without a buffer is a SIP that gets stopped at the worst possible moment.

3. Cover the catastrophes

Health insurance for the family, separate from any employer cover — employer cover ends with the job, usually at the least convenient moment. A family floater of ₹10 lakh or more in a city, with a super top-up above it, costs less than most people assume.

Term life insurance if anyone depends on your income. Roughly ten to fifteen times annual income, until your dependants no longer need it. Term, not endowment: it costs a fraction and covers several times more.

Insurance is not an investment and should not be bought as one. The products that promise both do neither well.

4. Clear expensive debt

Anything above about 12% comes before investing — credit cards first, then personal loans. Paying off a card at 42% a year is a guaranteed 42% return with no risk, which no investment offers.

Home loans sit differently. At 8% to 9%, with a deduction on the interest under the old regime, there is a genuine argument for investing instead. Run the prepayment comparison rather than deciding on instinct — the answer depends on your tax position and what the money would otherwise earn after tax.

5. Name the goals and give each one a date

Not "wealth" — specific things with specific dates. A deposit in four years. Education in twelve. Retirement in twenty-six.

The date decides the vehicle:

• Under three years — deposits or liquid funds. Certainty matters more than return.
• Three to seven years — mostly debt, some equity.
• Over seven years — mostly equity, because inflation is the bigger risk than volatility.

Inflate each target before working out the instalment. A goal priced in today's money is always underfunded. The goal calculator does the inflation first and then works backwards.

6. Automate and leave it alone

Standing instructions on the day after salary. Step the amounts up once a year with your appraisal — a 10% annual increase typically adds more to a twenty-year corpus than any plausible improvement in fund selection.

Review once a year, not once a week. Rebalance if the allocation has drifted more than ten percentage points. Otherwise do nothing, which is harder than it sounds and more valuable than most of the activity it replaces.

The page

Written out, a complete plan looks like this:

• Committed monthly spending: ₹____
• Emergency fund target: ₹____ — currently ₹____
• Health cover: ₹____ family floater, ₹____ top-up
• Term cover: ₹____ until age ____
• Debt above 12%: ₹____ — cleared by ____
• Goals, with dates, targets and monthly amounts
• Review date: ____

Everything else — which fund, which bank, which app — is detail. The order of these six is what determines whether the plan survives a bad year.