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Simple Steps towards your Financial Well being (for beginners)

Step-1: Become serious about your finances. Get answers to your basic questions on the internet. Get a very basic info about financial planning and investment options available. 'Discuss' with your elders, seniors and friends (beware: don't take 'ADVICE' from them, just have a discussion to start to get the feeling and views of managing finances. Your father or brother indeed is your well wisher, but may not be a subject matter expert. Everyone can sing a song but not every one is a professional singer, just like not every person who can hit the cricket ball in the street cricket is a professional cricketer). Also ask them if they have some financial advisors. Discuss with financial advisor/s you come across and decide who you feel you most helpful and knowledgeble. Take the next steps in consultation of that advisor.

Step-2: Creating an Emergency Reserve Fund of at least your 3 months Salary is your First Objective, as soon you start earning. This should take no more than 6 months of after you start working. Always maintain atleast 2 months Salary as reserve. 1 month's extra saving is for utilizing for starting Step-3&4

Step-3: once you have saved equal to your 3 months Salary, next immediate thing you will do is Insurance Planning. Buy Personal Accident Insurance, Term Life Insurance and Health Insurance (even if you have one provided by employer). These are must. Recommended to have a Critical Illness Insurance also, but you can do this little later also.

Step-4: Start Systematic Investment Plans (in Equity Oriented Balanced Funds and Diversified Equity Funds) for your Life (financial) Goals. Retirement, Long Term Emergency / Contingency Fund, Own Home Down Payment Fund are some of the default and common goals. Tax Planning / investments should get automatically achieved if you start SIP's in ELSS / Retirement Funds of Mutual Funds.
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