DIY Personal Finance Cheatsheet: How long does each step take?

Idea concept featured image

Published: October 16, 2016 at 1:45 pm

Last Updated on October 8, 2023 at 1:35 pm

Go to a bank or post office and you can locate a board that lists typical transaction times. Here is how long each basic step in financial planning will take.

Assumptions:

  • You know that equity investing is necessary to combat inflation.
  • You recognise the bad investments in your folio and have decided what to do about them. If not, spend a couple of hours over a weekend to sort this out.
  • You dont have any debt except a home-loan. If you do, perform steps 1-8 below, clear your debt and then resume.
  • You do not ask for product solutions in Asan Ideas for Wealth. Do that and the decision-making time will at least triple.

Announcement: You can be Rich Too With Goal Based Investing is now available at Amazon with a discount of 31% (Rs. 277). Or 37% off at Flipkart for Rs. 251  Grab it now!

1) Scrounge around for extra cash to set up an emergency fund. – 10 mins  to think about it and less than a few hours to implement it.


Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

2) Follow it up by allocating at least 10% of your salary each month to this emergency fund until it grows to a decent size – 10 mins  to automate this process

3) Use insurance calculator for the young  if you are an unmarried earner or this comprehensive child planner if you have kids, to find out how much life insurance you need. This would take 20-30 mins

4) Read How to Buy a Term Life Insurance Policy (20 mins)

5) Shortlist life insurers (do not ask anyone’s opinion). This is personal finance). Find out by either using their online calculators or by contacting them, how much insurance you will get for your profile. If this is more than what you need, you can always reduce. If this is less, return to step (3) and work out how best this sum insured can be utilized. (over 2-3 days since there is correspondence involved. Not more than 30 mins a day)

6) Apply for the policy, take the medical and wait. A single policy is all that you need. If the premium is loaded, you will need to take a call on the sum insured. (over 2-3 days)

7) Read How to Buy a Health Insurance Policy (20 mins)

8) Shortlist health insurers (do not ask anyone’s opinion. This is personal finance). Take a call. Max 2 weekends:  One hour in one weekend  to shortlist and another hour the next weekend to decide. You have the week in between to mull over.

9) Use the financial plan creator to  see where you stand (one hour). Take another hour to introspect. Will your income grow as much as you dream? How are you going to balance your needs and wants.  This is list issues. Solutions can be obtained over a course of time.

10) Decide asset allocation (% in equity and % in debt) for each of your financial goals.  A simple cheat sheet to get you started.  Modify after experience.

  • Annual goals and goals less than 5Y away: no equity (choose simple safe instruments immediately)
  • Goal between 5-10Y: 20-30% equity  (conservative,5-6Y); 60-70% equity (aggressive, choose for 9,10Y ); above that (madness)
  • Goal above 10Y: Max 60%-70% equity.

Use this as a thumb rule to get started on goal-based asset allocation. You can always fine tune later.

Spend a few hours over a week and then decide.

11) Decide on investment strategy: one portfolio for all long-term goals or separate. Either will work. Just that you need to think about it. Read moreabout this if you like. Spend a weekend deciding, but not more

12) How will the equity folio be assembled? Same for debt. Aim for minimal no of investments. Too many ways to do this.  Best to keep it simple:

Buy index funds! Just a Nifty or Sensex index fund will do.

Debt folio: Use PPF for goals 15 financial years away. Use a money market fund or arbitrage funds for short-term goals.

Suggest you start with this. You can read more and add more later!

13) Choose instruments.  With the guides available here(links on top right), it should take you 20 mins to short-list equity funds and 2o mins for debt funds. Worry about tax planning only now. It should be integrated with goal-planning.

14) Begin investing (over the course of 3-4 weeks) in direct mutual funds of course!

14) Monitor only monthly investment and not fund performance each month (10-2o mins)

15) Monitor fund performance after a few years. I have a post on this. You can read it when you find the time. There is no flaming hurry.

Monitor only every few months (10-20 mins)

That is all there is to it. If needed add an accident insurance (same time as health insurance).

To summarize:

  • 1 weekend for setting up emergency fund
  • 2 weekends for obtaining life insurance
  • 2 weekends for obtaining health insurance
  • 1 weekend to access financial goals
  • 1 week to decide asset allocation (few hours only)
  • 1 week to decide investment strategy and assemble folio (few hours only)
  • 1 weekend to choose instruments for goals with tax planning integrated into these goals.
  • 1 month to start and complete all investments.
  • All of the above can be completed in under 3 months or at best 6 months.  Recognise that the total amount of hours you will spend will be quite small.  When I say weekend, I dont mean the entire weekend – just an hour or so.

Then monthly monitoring of investments each week. Let me know if I missed any activity.

Here is a list of ‘how-to’ articles. If you want more clarity on any of the above activities, let me know.

Review growth after few years. The review process will only take an hour.

Performing these tasks requires only inclination. Confidence will help, but it can be developed. Even those with no confidence and (self-proclaimed) low grasping skills can manage to complete this by spending a few hours over a year. That is no small achievement.

The DIY investor can learn and implement, step by step. He/she can work and enjoy life as usual. The effort associated with DIY will not hamper their activities in any way.

Take it one step at a time and see where it goes. That is all that can be said. The rest is up to the individual.

DIY money management is not for everyone.  Those who do have the inclination or time to pull this off can consult a fee-only financial planner, pay for financial advice, but insist on direct mutual fund plans

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.
🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)