In today's times, Most of the times financial crisis occurs in our life not because of lack of enough income but, not following proper financial Planning.
It doesn't matter if your monthly income is 5000 PM or 100000 PM, You must have some plan to manage your money.
Priority 1:
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Before going for any investment/Savings, You must fulfill these goals, May be most of these are one time spendings/expenses and most of the people tend to avoid these goals. But remember this is your first priority in your financial Planning.
i. Health Insurance:
Whatever the age, You must take the health insurance for yourself and for your dependents.
ii. Life Insurance:
Remember, Life insurance means pure term Plan. Don't take any traditional insurance plans who offer returns after policy ends.
Don't Mix Insurance with investment.
If you have any concerns while taking term plan, You can comment here or you can whatsapp me at 8801 64 8801.
Here's my Blog post on the Same Term insurance Comparison 2019
iii. Emergency Fund:
You don't know when you lose your job, or sometimes we will need money for emergency needs. For that purpose we must maintain Emergency funds. It must be atleast 3 months of your income or 6 months of your spendings.
Park your emergency fund in Liquid Funds.
If you don't know about liquid funds, i will post another blog post about liquid funds soon. Till now, if you want to know more about Liquid funds drop me a whatsapp message.
Priority 2:
Follow 50/30/20 Rule
| Rule | Purpose | Where to Invest |
| Rule 20 | Once you Receive your Paycheck, You need to put/allocate at least 20% of your income into savings/investment accounts. Remember that this amount have to be utilize for long term goals. |
If you want your money works for you, you must give equity exposure to your investments. |
| Rule 50 | You can allocate max 50% of your income for your house needs and common spending Ex: House rent, EMI payments, groceries,insurance premiums etc. |
Maintain separate account for your spendings. Its best practise to maintain joint acount incase both husband and wife are working |
| Rule 30 | You can allocate max 30% of your income for your entertainment needs, Dining out,children toys or short term goals like foreign trip etc. |
Save this amount to short term debt funds, So that you will get better returns than saving accout. |
Note: I've developed few tools to calculate above mentioned terms. Drop me a whatsapp message i will provide you the link.
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