Whether you are earning or not, Money is a part of everyone’s life! From a homemaker to CEO of any MNC, personal finance and investments are there to manage.
While managing your responsibilities, liabilities and creating assets for you, keep your finances simple!
- Make a list of your short term and long term goals: This is how you will get clear direction for your investments. You ca choose your asset allocation accordingly. E. g long term goals can go for equity and mutual funds investments etc.
- Read about personal finance: Read and understand about personal finance, investments, their functionality, tax implication etc.
- Dont accumulate too much of single type of asset, instead diversify: People tend to accumulate too much of single type of asset like gold, real estate etc. Instead, diversify in different categories.
- Too many bank a/cs are to avoid. One single and one joint holding a/c will be enough where you can segregate your expenses and investments.
- Create a contingency fund for you. A sum total of your six months income can be your contingency fund.
- Take “term Insurance” without fail. It will take care of dependants after you! As per the thumb rule, your 10 years annual income can be the term insurance cover.
- Take health insurance Policy for you and family. Though you have got your group mediclaim from the employer, get one personal policy for you and family.
- Keep your expenses on check. Money saved is money earned. Dont indulge in unwanted shopping using credit cards etc.
- Make nomination in all your investments. Make your spouse aware about it.
- Keep all your investment records updated. Like, bank a/c login IDs, passwords, names of relationship manager, details of loans taken, details of all insurance policies. Update all these records and make your spouse aware about it.
- Review your investments regularly. Specially, investments which are market linked are important to be reviewed as their performance is subject to market risks.
When you keep it simple, you can enjoy your investments and get maximum out of them!