Yes, you are happy that your salary has finally reached your bank account. But don’t make this joy overwhelm you! A lot of people overwhelmed by this joy, end up spending all of their salary, long before they are even halfway into the month. This is a strict no-no! If you want your future to be secure, investing some time and efforts into making financial plans is highly advisable. Wondering why financial security is so important? Here is the reason-
Importance of financial security and planning-
You may be financially strong and content at this moment. But what will happen post retirement- have you even considered? Life post retirement changes dramatically. Your kids will grow up, which means responsibilities such as their higher studies and marriage will stand knocking at your door. What else? You and your wife will be at the second half of your life, which means more medical expenses. In such a scenario, you can’t assume a laid back attitude as far as planning for your future is concerned. If you are clueless as to how to go about it, then comb through this checklist below-
- Have you fixed a monthly budget yet?
Watching your monthly expenses and setting a fixed budget for every month is of the utmost importance. Your monthly expenditure doesn’t only include groceries, veggies and recurring expenses such as electricity bills and house rent; it also includes recreational activities. Setting a separate budget for such expenses and abiding by it is important to secure your future financially.
- Are you prepared for the unexpected?
You don’t know what lies in your future. You may lose your job or suffer from some terminal disease. Do you have enough money to meet such unexpected and uninvited expenses? Probably not! So, start saving right away. Set a separate emergency fund for meeting such needs. And a portion of your monthly income should directly go into this fund.
- How are you going to fulfill your big dreams?
Everyone nurtures big dreams in their heart such as buying a house, a car, going on a world tour and the like. Have you done anything to ensure you have enough money to fulfill such dreams when the time comes? If, not, start saving from today. And no, saving a tiny bit of your salary in your savings bank account every month, won’t do you any good. For big dreams, the investments must be made in high-return instruments such as mutual funds, equities and corporate fixed deposits. For detailed information regarding these, you can talk to a financial advisor.
- Are you planning for your retirement?
Retirement is an inevitable part of the service life. And for a lot of employees, the post retirement period is the most dreaded phase of life. If you want your post retirement experience to be pleasant, you must start investing for it now. And to have your money compounded generously over the years, you must start saving early on. For the best retirement plans, you can talk to your financial consultant.
- What are you doing to save taxes?
The tax laws of your land have provisions that enable you to claim for waiver of taxes levied on your income, so, why not put this to your advantage and save a few bucks? By investing smartly, you will not just save tax but will also get good returns on your investments. Generally, equity and mutual funds linked tax saving schemes offer the highest returns. And that these returns are also not taxed is definitely a plus. Most financial planning services should be able to guide you in this respect, but be wise and choose the best.
By ticking off this effective yet doable checklist for financial planning, you sure will make yours and your family’s future financially secure.