There’s too much of financial ‘wisdom’ being branded about. Too many words telling you too less. Don’t get overwhelmed with it – here’s the gist of it.
Financial planning is simple. One sincere Sunday sitting with your wife and you can pretty much simplify and sort a lot of your financial issues.
Generally you can’t help or control how much you earn. However what you do with the money after it is earned, is fully in your control. Most of us worry more about what they have no control on, and neglect what they have full control on, in financial matters.
You’re paying a lot of tax on your salary. Agreed. But there’s nothing much you can do about it. Stop worrying about it, therefore.
There’s a lot of tax you can save on the investments that you do after you get your salary. Worry about that. It is in your control!
If you want to save yourself future financial hassles, save for specific requirements (‘financial goals’) like children education, their marriage, a house etc, rather than saving in general. You’re more likely to stick to the savings plan if you know what is coming up in future.
Insure yourself, your house, your car, your business, your health against things that shouldn’t happen but can happen. It doesn’t cost much.
Don’t be proud of a big balance in your savings bank account or in FDs. Your banker is celebrating it more than you.
Don’t be proud of so many insurance policies you have. They’re creating a lot of wealth – for your insurance agent and the insurance company.
The big balance in your credit card statement is not your gain but what you owe. Settle it in full – always and every time.
Pay slip is not as complicated as you think. Understand it as also your taxation and the concept of inflation. There’s no bravado in not knowing about them.
Start healthy SIPs in a good bouquet of mutual funds. Great if you can do it yourself. Otherwise, don’t have an ego issue in going to a financial planner to manage your financial worries.
Build an emergency fund equal to about 3 – 6 months’ expenses. Put it away in a bank FD or better still, in a liquid fund.
You’ve never thought about WILL. It’s not that only others die prematurely. Get that protection umbrella over your family – you owe that much to your loved ones.