By doing the right financial planning on time, the challenges in life can be easily faced. You can deal with most challenges. And enables you to enjoy the fruits of your hard work, as a result, you live a secure life and without financial problems, you can complete all tasks on time and move forward in life. For this, you need to keep these 5 things in mind.
1. Dream a Dream and Give It a Digit
Every target is a dream and a number is associated with the dream. For example, if you want to retire at the age of 50, this can be a dream of yours. And then it turns into a target. When you calculate how much money should be in your bank account to decide retirement at the age of 50 and live the rest of your life.
2. Avoid taking loans with high-interest rates
Taking a loan means mortgaging your property with a financial institution. Think of it like today you only need 3 mangoes and you have mortgaged your entire garden to a financial institution by taking a loan. If you pay 35% interest on your credit card and 22% on a personal loan, then it is very difficult for you to reach the target. In fact, paying 22% interest on the loan is equivalent to getting a 22% return on the invested portion of your savings.
3. Keep arrangements for an emergency fund as well
We have learned from education that nothing is permanent. Uncertainty is everywhere. Corona Pandemic brought it to your doorstep. You cannot prevent emergencies from coming, but you can plan well in advance for such unwanted challenges. Now the question is how to create an emergency fund. For this, you need to keep some part of your monthly income separately as an emergency fund to deal with an emergency-like situation for about a year.
4. Get insurance cover
Generally, we understand the insurance policy as life and health coverage only. But in reality, it is much more than that. In fact, a very unfortunate event can wipe out your savings in a jiffy, leaving you and your family bankrupt. In such a situation, you and your family should have insurance cover. Of course, the first insurance you should have should be a term cover for your life. In such a situation, the cover is available to himself or his family members when needed in bad condition.
5. Invest in SIP instruments to meet the target
When you plan to achieve the financial target, then it is important to keep two things in mind. You can decide to invest through SIP for planning to meet medium-term and long term targets. Fix each SIP for a specific target goal, so that you don't end up like an Alice in Wonderland character.
