PDCA for personal finance

Plan Do Check ActP-D-C-A (Plan – Do – Check – Act) is a methodology very popular in business circles with respect to business growth. Let’s see how one can apply this methodology to personal finance.

Every person has certain ambitions in life which drives him to work hard and earn money. So note down your objectives, it could be anything like buying a house, buying a car, going for vacation, wealth generation for retirement etc.

So how do one achieve those objectives?


Identify different investment avenues to suit your risk appetite. It could be equity, mutual funds , fixed deposits, property etc. Now establish the income you will generate by allocating the funds in different instruments. This is the first step of P-D-C-A i.e. ‘PLAN’ your finance. This can also be done with the help of your financier advisor. But make sure to involve your family members also in the planning process, after all you cannot enjoy the achievement without involving your near and dear one’s.


Make a consistent effort to adhere to your plan. e.g. if you have decided to start a SIP (systematic investment plan), do not postpone it to next month and if you have already started one make sure that you don’t default. This is the second step i.e ‘DO


Keep a tab on your investment portfolio, review if everything going as per plan. No need to check for share price or mutual fund balance on a daily basis but periodic review is a must. Decide on review intervals or triggers and stick to it. It might be once in a quarter or when there is sudden change in share market or increase in your salary or making one time big investment etc. This is the ‘CHECK’ stage.


Once you review your portfolio, take corrective actions, if required. You may have to implement changes in your investment strategy to maintain the balance. It may be anything like increasing you SIP installment or changing your exposure to equity etc. This is ‘ACT‘ stage.

Financial planning is like a marathon, all 4 stages are recursive in nature. Following these stages will definitely help you to achieve your financial goal in more professional way.