In today’s fast paced environment we are living without proper planning even though we are counting every day on how to protect ourselves financially. Only if we position ourselves economically can we live life without any fear. The first step is to save. It is important to decide whether to reduce the specific cost rather than just thinking of saving the specified amount per month.
In this post you will find some tips on how to protect ourselves in the economic situation.
Emergency funding
This emergency fund is like CPR first aid given to us on the verge of death. You need to calculate how much a family costs per month for your family.
It is advisable to keep the amount in a bank savings account or FD for about 6 months. (Rs. 30,000 per month for a period of 6 months 6 × 30,000 = Rs. 1,80,000)
Future investment
This investment will be useful for our leisure time, such as children’s education and marriage. If we save for these projects now, we will not have any borrowing land in the future. This investment can be successful if you invest Rs. 2500 per month in a Mutual Fund for 20 years.
Mutual fund scheme is a joint venture with the stock market so the profit will be higher. Not only that but the risk is very very low as it is a long term investment.
Reducing debt
There are two major types of debt consolidation. One of which is good credit the other is bad credit.
Good credit – less than 10% of all loans are good loans, of which home loans are the best. It can be said that it is a loan but it is also a kind of savings and property.
These loans carry an interest rate of 8% to 9% only.
Bad Credit – Debts that are 12% to 15% or more are bad loans. (Example – credit card loan personal loan) Such loans will definitely immerse us in debt because high interest loans will therefore cost #EMI on the salary we buy. Destroys the very idea of saving.
If you already have such loans, the only way to reduce the loan installments is to get money from friends, relatives or co-workers and pay off the loans in advance.
Insurance
Insurance is the amount of insurance that is available to our family after us so that the family economy is safe. But we misunderstand this and insure against misguided plans in terms of investment.
( The most important reason for that is that there will be an Insurance Agent by the name of our own friend ).
Normally an insurance plan of Rs 5 lakh would cost Rs 2,000 per month for 15 years. 5 lakh will be available to our family in case of any mishap in the meantime. Otherwise we will get 5 lakhs after 15 years. That is the amount we have paid in 15 years
(180 month × 2000 = 3,60,000)
Insurance – Insurance is not the only investment.
This type of insurance plan is the only plan that offers good returns. This is because of the fact that these types of plans have a lower monthly fee and a higher insurance premium. But the money we can pay in this scheme is only after us and the family will not get the amount we paid if we are alive.
1 crore insurance for 40 years at Rs. 750 per month.
40 years if 480 months
(480 × 750 = 3,60,0000) .
