Finlabs India

First Things First

From my own experiences as well as while reading various studies, it has been proven that if you have a long list of things to get done, the best way to get them done is to write them down in black and white. So here are some things from the personal finance space that I think many of us should consider writing down (congratulations if you are already on top of it).

1. First things first

Keep aside an amount for the rainy days, as emergencies always come unannounced and are capable of disrupting your normal flow of things. If you have a fund kept aside in an emergency fund, your mind will be free from the financial point of view. An ideal product to be considered is a liquid mutual fund. Also, a family floater health insurance policy (like Mediclaim) is a must-have to protect your savings.

2. Finish off your tax planning in the first month itself.

To take full advantage of the 80C, March is not always the most auspicious month to start your tax planning. Besides, if you want to make the most of the popular tax-saving products like the Tax Saving Mutual Funds (ELSS) or the Public Provident Fund (PPF), it makes great sense to start early. Get that ELSS SIP going from Day 1 itself.

3. Stop procrastinating to take the necessary term cover.

This is one of the best protections you can give your family. You lock your home doors every night before sleeping so that everyone and everything in the house remains safe and secure. Similarly, if you want to ensure that your family does not face any financial trouble when you are no longer there, get adequate term insurance in place. (Not just any policy with a paltry sum assured that you were advised to buy for tax planning.)

4. Ensure discipline in investments.

A health coach will tell you that 30 minutes of physical exercise three times a week on a regular basis is necessary to be fit. Similarly, to be financially fit, ensure that you follow the motto of Income-Investments = Expenses rather than Income-Expenses  = Savings (yes, most of the time, and/or for many of us, it does not translate even into investments). Initiate automatic investments through MF SIPs to ensure discipline and regularity in investments. This will also ensure that your savings do not lie idle in a savings account.

5. Keep a record of your financial investments and share it with your family.

You would already have a good portfolio of investments in various products, ranging from your bank deposits to mutual funds to direct equity. Because this entails investments from multiple accounts, let a family member know the details of all these investments. Ensure that you have a nominee in place for all your investments, whether they are compulsory or not.

6. Pay all our bills on time.

With the advent of technology, you no longer need to write checks and go and hand them over physically to be paid. Right from your utility bills to housing maintenance to premium payments to credit card bills, the entire transaction, from getting the soft copy of the bill to paying it digitally through money wallets, UPI, or NEFT, can be automated and completed with a few clicks on your laptop or your smart phone. Do it.

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