To go anyplace, you need an arrangement and the equivalent goes for your financial future. Sadly a budgetary arrangement shows up, to a large portion of us, similar to a visit to the dental specialist - something to delay until you wake up shouting amidst the night. So we thought of a monetary arrangement that is increasingly similar to a visit to your preferred bistro. It includes shaping straightforward propensities and takes not exactly an hour to begin actualizing.
Investing, tax planning
• Maximise your Employee Provident Fund (EPF) contribution. If your total contribution (including your employer's) to EPF is less than Rs 1.5 lakh, invest the difference in Tax Saving (ELSS) funds. Your tax planning is done.
• Invest 30% of your take home salary in diversified equity mutual funds. Never invest directly in stocks. Schedule a SIP to automate this habit.
• Got your annual bonus? Invest 50% of it in a 5 year auto-renewing bank FD. This is your emergency fund.
• Invest the remaining bonus in yourself - take a course, travel, do fun stuff.
• If you have a home loan, split the bonus 3 ways - one third to prepay the loan.
Insurance
• If you have people who depend on your income, then buy a 40 year term life insurance plan at 25, then a 30 year plan at 35 and a 20 year plan at 45. Every time make sure the total sum insured is 30x your then salary. There is no need to buy a life insurance policy unless you have dependents.
• Buy health insurance for every member of your family. Even if you're covered by your employer.
• Buy insurance for your car, your house and its contents.
• Renew your insurance every year 1 month in advance.
Loans
Only ever take a loan to buy a home. Never more than 75% and never longer than 15 years. Pay it off within 7 years. Yes, it's possible.
Bonus tips
• Maintain a single no frills bank account and a single no frills credit card.
• Set all your bills (electricity, phone etc) to auto-debit to your credit card every month.
• Pay off your credit card every month - in full. Set it to auto-debit your bank account every month.