Mumbai, November 16: There are many ways you can employ to manage your personal finances. A few people set aside a lump sum every month for future exigencies. While many resort to putting money in the weekly community saving schemes, wherein people form a team and collect funds.
We discuss A few tips that would help you take care of your financial health.
Do you need a life insurance?
It has come to the fore that a significant number of salaried class people is duped by life insurance agents, who sell wrong or unrequired policy. Due to this mis-selling, most of the people end up buying life insurance cover when they do not need it. Always keep this in your mind you need a life cover in case you have family members dependent on your income. The number of family members determines which life cover you should go for. Financial advisors push for family floater plans for salaries people.
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Increases funds for retirement corpus
Saving for retirement is a good idea. But most of the people end up saving less for their retirement. They largely focus on things like investing in gold, building funds for daughter’s wedding, or putting money in bank fixed deposit for any exigency. This shows poor retirement planning on their part. Financial planners say a person should earmark at least 15 per cent of his or her monthly income for retirement. This does not end here. The amount they set aside for old age must keep on increasing at least every six months.
How good is your credit score?
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A good credit score helps you keep your financial health intact. At the same time a bad credit score spoils your plans to keep you financially fit. Banks keep a track of loans disbursed and repayments done by the customer. They also track loan taker’s credit score as well. If you have not done repayment in the stipulated time, you may be labelled as a defaulter. This tagging may land you in trouble as you may not be able to get fresh credit in future, which can destroy you dream of achieving any financial goal say for example your daughter’s wedding.
Do you have a household budget?
Not many of you draw a proper household budget to run your family and at the same time manage your money optimally. Your household budget segregates day-to-day essential requirements from the non-essential ones. For example if you have a household budget, then you can easily figure out you have to make payment for food items that you buy for your kitchen. You will also come to know that you have to pay for the domestic cooking gas. These are essential needs that you cannot avoid. A household budget will make you keep your expenditure in control. Subsequently it will keep your financial health intact.
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Do you know your net worth?
Knowing your net worth is no less important than drawing a household budget. Your net worth is equal to your total assets minus your debt and liabilities. You have to calculate your net worth and arrive at a number. If you arrive at a positive number then you are moving on a right financial road. But if you calculate a negative number you need to change your course. Negative number means you are piling up debt fast. Here you need to cut on your rate of accumulating debt. If you make it a practice to cut debt significantly, you can easily keep yourself financially fit.
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