The Reasons Why You Need Emergency Fund

Saving up your hard-earned cash to stash away an emergency fund? 

Saving up your hard-earned cash to stash away an emergency fund?

Well, it can be a hard sell. Spare cash can be hard to come by, and, after all, taking a vacation is a heck of a lot more fun.

Or at least a lot of us seem to think so. The idea behind an emergency fund is to store at least six months of net income for the sake of “just in case.” Just in case your job goes “poof.” Just in case your car conks out. And a select few other things we’ll explain below.

Does that mean an “emergency” outfit for the film festival (rumor has it Jude Law will make an appearance)? That big trip your teen suddenly wants to take this summer because “everyone else is”?

Not exactly.

We’ve written before about exactly what counts as an emergency. One of the biggest reasons to have an emergency fund is to avoid going into debt for a cost you just can’t avoid (i.e, not celebrities or peer pressure).

In our survey above, 31% of respondents said that credit card debt was a significant impediment to reaching their financial goals, and they each had an average of $5,000 to pay off. Well, guess what? If they had an emergency fund, they shouldn’t need to get so far in the hole in the first place.

Don’t believe us? Planning to spend your money on something sexier? Nothing’s sexier than being worry-free.

Here are the top seven reasons you need an emergency fund:

1. You’ve received a Pink Slip

It usually isn’t as dramatic as Donald Trump proclaiming “You’re fired!” In recent years, it’s looked more like rounds of layoffs spurred by economic turmoil. Or maybe you chose to resign because your job is taking a serious toll on your mental health and you were burning out. Whatever the reason, you need a way to pay your bills until you establish another source of income–and your emergency fund should be it.

2. You Can’t Shake That Cough

Robitussin isn’t cutting it anymore. You need to go to the doctor, and then maybe the doctor again, and possibly even the hospital. Most health insurance plans only go so far–when it comes to hospital visits or other major medical costs, it’s likely you’ll be required to supplement your coverage (if you have it). With an emergency fund, you won’t have to choose between your well-being and your rent.

3. The Only Job You Can Get Is Three States Away

According to our survey, 60% of respondents have, at some point, had the experience of being unemployed and looking for a job. And as we all know, when things are getting financially tight, we need to consider any suitable position that crosses our path … whether it’s where you live … or in Portland. Between finding new housing, arranging to transport your things and the million other little costs that come up along the way, a move is expensive, but it can be unavoidable.

How can you help finance an emergency move? You guessed it.

4.You find yourself with a debilitating illness.

If you’re too sick to work, you could lose your job. And even if you qualify for short-term disability, you could wind up living on less than your full salary. An emergency fund could help you make it through

5. You Need to Get to the ER. Stat.

Did you know that in many cases, you have to pay for some or all of an ambulance ride to the hospital? (And if you don’t have health insurance, it’s even more likely you’ll be responsible for covering the whole cost.) If you get hurt enough to spend time in a hospital or emergency room–maybe even hurt enough to need surgery and physical therapy–you can’t always rely on insurance to cover the full cost.

6. Someone Close to You Passes Away

No one likes to plan ahead for mourning, but if someone you love does pass away suddenly, “I can’t afford the plane ticket” is the last thought you’ll want to have. If you have to travel to (or pay for) a funeral, burial service or any other bereavement-related expenses, your emergency fund can keep those charges off your credit card.

7. Your Roof Starts Leaking

If you own your home (like 70% of you said you did in our survey), you know that there are few things more ominous than watching the paint swell and crack above your head. It’s right up there with discovering a flood in the basement or setting the kitchen on fire before a particularly ambitious dinner party. First, make sure you have homeowner’s insurance. But, then, if an unexpected home-related expense pops up, rest assured that that’s part of what your emergency fund is there for.

If you are finding in difficulty in managing your emergencyfund 

Leave a missed call @ 022-62116588 

(Or) www.moneymindz.com

(Or) Download  Financial Freedom App

Things That Women Should Know About Life Insurance!

There is a myth in india that life insurance is only for men

There is a myth in india that life insurance is only for men. In simplest form, life insurance means protection against risks in life. While men might not give it due attention, risks also exist in a woman’s life, sometime even more than a man’s life.

Even though a woman may not be considered a breadwinner in the conventional manner, she also needs to protect against life’s risks, and thus needs life insurance.

In today's world, a woman's contribution to the finances of a family cannot be ignored. Besides, they provide much more than men in household matters. But women are seen to be holding themselves back when it comes to buying life insurance. 

While most men are aware of the fact that life insurance can be an emergency fund and help meet one's objectives or protect their families, it is time women know their importance in their loved one’s lives. They need to get themselves insured, in fact, adequately insured. 

Why women must buy life insurance?

The biggest reason a working woman must buy life insurance is because she is adding to her household income. Of course, about 100 years ago, the value that women were providing to the home wasn't considered worth insuring, but not anymore. Today the woman’s salary provides equally for the family, sometimes even more. 

Now as a woman, you can actually put a number to the value you provide to the household and help your family to continue living at their current lifestyle.

So the reason you need a life insurance is to ensure that your family has the income to stay afloat even if something happens to you – like permanent disability, accident, or untimely death.

Now, if you are a single, working woman, the reason you must purchase life insurance is when you have ageing parents (or any other dependents like younger brother or sister) that you're caring for. 

What kind of insurance women should buy?

What are the various types of life insurance?

There are two basic types of life insurance policies viz. Traditional Whole Life and Term Life Insurance. A whole life is a policy you pay till death of the policy holder and term life is a policy for a fixed amount of time.

The basic types of  life insurance policies are:

Term insurance

Term plans are the most basic form of life insurance. They provide life cover with no savings / profits component. They are the most affordable form of life insurance as premiums are cheaper compared to other life insurance plans.

Online term insurance plans provide pure risk cover, which explains the lower premiums. A fixed sum of money - the sum assured – is paid to the beneficiaries if the policyholder expires over the policy term. If the policyholder survives, there is no pay out.

Endowment plans

Endowment plans differ from term plans in one critical aspect i.e. maturity benefit. Unlike term plans which pay out the sum assured, along with profits, only in case of an eventuality over the policy term, endowment planspay out the sum assured under both scenarios – death and survival. However, endowment plans charge higher fees / expenses – reflected in premiums – for paying out sum assured, along with profits, in either scenario – death or maturity. The profits are an outcome of premiums being invested in asset markets – equities and debt.

Unit linked insurance plans (ULIP)

ULIPs are a variant of the traditional endowment plan.They pay out the sum assured (or the investment portfolio if its higher) on death/maturity.

ULIPs differ from traditional endowment plans in certain areas. As the name suggests, performance of ULIP is linked to markets. Individuals can choose the allocation for investments in stock/debt markets. The value of the investment portfolio is captured by the NAV (net asset value). To that end, there are many similarities between ULIPs and mutual funds. ULIPs differ in one area, they are a combination of investment and insurance, while mutual funds are a pure investment avenue

Whole life policy

A whole life insurance policy covers a policyholder over his life. The main feature of a whole life policy is that the validity of the policy is not defined so the individual enjoys the life cover throughout his life. The policyholder pays regular premiums until his death, upon which the corpus is paid out to the family. The policy expiresonly in case of an eventuality as there is no pre-defined policy tenure.

Money back policy

A money back policy is a variant of the endowment plan. It gives periodic payments over the policy term. To that end, a portion of the sum assured is paid out at regular intervals. If the policy holder survives the term, he gets the balance sum assured. In case of death over the policy term, the beneficiary gets the full sum assured.

You getting married: How will protect your Finances?

The First Step would be sitting with your partner and have a candid conversation about money

Preparing to get married is an exciting time, but it is also fraught with expectations, tough financial decisions, and potentially awkward conversations.

Although getting married can be financially beneficial, sharing the wealth — and the debt can make you feel like you’re paying more than your fair share. That’s why in most cases, it’s best to set clear financial expectations from the start and take steps to protect your assets, especially if one partner comes into the marriage with significant wealth or with children from previous relationships.

Here the some tips to protect your finances.

Have a Honest Conversation With Your fiancé: 

The First Step would be sitting with your partner and have a candid conversation about money.

Before you wed, you should explore values surrounding budgets, debt, lifestyle, retirement goals and plans, children and college, and so much more. It is ok if both of you doesn’t agree to everything.

If you marrying someone who doesn’t care about budgets, debt then it is going to be lot of tensions and conflict.

You should start sharing your credit report

Any joint account you open will require a credit report being checked for both you and your spouse. If your spouse’s credit is too poor to use for a home or car loan, you may be tempted to take on those financial responsibilities on your own.

Protecting your assets 

You have to ensure that your separate asset remains separate and that will protect in future.

Sitting your goals for the future is a important step. Whether these goals are joint financial goals or something you’d like to take on alone, it’s important to work toward a goal and set a plan to do so. “You’d be surprised how many people make assumptions about how others think about saving and spending

Think Big Pictures

Having these tough financial discussions may seem unromantic in the months leading up to your wedding, but it’s important to keep the big picture in mind.

“Differences in spending habits and financial goals are precursors to divorces — and one of the biggest reasons why people divorce,” Hutchinson says. “[You want it to be] the strongest possible start…so when challenges arise, you have already had these conversations and don’t have to start from square one. It doesn’t mean you don’t trust or love [your spouse.]”

Kruger echoes that sentiment.

“When you get married, you tie an emotional and financial knot that you need to keep strong throughout your lives together,” she says. “Talking about money and financial issues doesn’t come naturally to all of us, but it’s a critical conversation to have with your partners

For more information on how to manage your Personal Finance

Leave a Missed call @ 022-62116588

(Or) Visit : www.moneymindz.com

(Or) Download Financial Freedom Application to Get better insight of your Day to day 

Expenses

Do you believe money is important?

Money which is a solution of all problems actually becomes the root of all problems for most people.

The importance of money in human life is similar to the importance of food for the body. Just like you can’t live even for a few days without food, you can’t survive for long without money.

You can definitely solve most of your problems of life if you have unlimited supply of money. If you have lots of money:-,

You won’t be facing basic problems of life like food, water, shelter or clothing.

You can buy all items for your comfort like house, Air-conditioners, TV and other household goods to live comfortably.

You can engage many servants to take care of you and live like a king

The only problem is that money does not come just like that to any person by any amount of wishing, praying or wanting. You have to work hard and compete with fellow human beings to earn money as the supply of money is limited in this world but the demand of money is unlimited.

Hence, money which is a solution of all problems actually becomes the root of all problems for most people.

Most people fail to strike a balance between earning and enjoying money. They believe that more money means more joy. Hence they workday and night; make all sorts of compromises and suffer all types of pain in order to earn money in the hope that they would use this money to enjoy happiness soon. However, for most people, such time never comes and they die unhappy and dissatisfied.

"How Much Land Does a Man Require?" is a beautiful story by Leo Tolstoy which explains this nature of man.

A peasant named Pahom overhears his wife and sister-in-law argue over the merits of town and peasant farm life. He thinks to himself"if I had plenty of land, I shouldn't fear the Devil himself!" Satan is present sitting behind the stove and listening. Satan abruptly accepts his challenge and also tells that he would give Pahom more land and then snatch everything from him.

A short amount of time later, a landlady in the village decides to sell her estate, and the peasants of the village buy as much of that land as they can. Pahom himself purchases some land, and by working off the extra land is able to repay his debts and live a more comfortable life.

Later, he moves to a larger area of land at another Commune.Here, he can grow even more crops and a mass a small fortune, but he has to grow the crops on rented land, which irritates him. Finally, after buying and selling a lot of fertile and good land, he is introduced to the Bashkirs, and is told that they are simple-minded people who own a huge amount of land.

Pahom goes to them to take as much of their land for as low a price as he can negotiate. Their offer is very unusual: for a sum of one thousand rubles, Pahom can walk around as large an area as he wants, starting at daybreak, marking his route with a spade along the way. If he reaches his starting point by sunset that day, the entire area of land his route encloses will be his, but if he does not reach his starting point he will lose his money and receive no land.

Pahom is delighted as he believes that he can cover a great distance and has chanced upon the bargain of a lifetime. He stays out as late as possible, marking out land until just before the sun sets. Toward the end,he realizes he is far from the starting point and runs back as fast as he can to the waiting Bashkirs. He finally arrives at the starting point just as the sun sets. The Bashkirs cheer his good fortune, but exhausted from the run, Pahom drops dead.

His servant buries him in an ordinary grave only six feet long, thus ironically answering the question posed in the title of the story.

This story provides the greatest wisdom about money.

You must ask this question: “How much money does a man require?”

And then try to find the answer yourself.

The right answer to this question can solve most of the problems of your life and fill it with joy and peace.

If You are finding difficulty in managing your personal Finance 

Leave a Missed call @ 022 - 62116588 

(Or) www.moneymindz.com

Tips To strengthened your Saving Plan

To be honest with you, spending the money is a very easy task. However, saving the money is a very tough task. You are working hard in a company to deliver the given target for the company. Furthermore, you are getting salary at the end of the month for all your hard work.

Now, the major thing is you must also learn to save your money in a logical fashion. We have got some exciting tips to undertake some cool savings in a systematic and satisfactory manner. They are given below as follows:

Select A Good Bank: You must be judicious in selecting a good bank and open a bank account. Check for the facilities and benefits.

Take Insurance And Pay Annually: One of the best aspects of the finest savings is that select a good insurance plan and make premium payment in an annual manner. This prevents that extra pressure on your salary and helps you to enjoy benefits.

Do Not Spend Money, When You Are Emotional: Various problems can take place, and at this juncture, you must be careful in spending money in a logical manner. During emotions, being upset, you can spend without any control. This can be disastrous at times.

Avoid Usage Of ATM: You must be careful in going to ATM, because you incur the withdrawal fees. Have an effective plan, and withdraw amount accordingly.

Check Bank Statements: Please make sure that you check your bank statements in a regular manner. Understanding how much you have spent, help in managing the finances in a logical manner.

Follow 30 day Rule: You received your salary and wanted to purchase groceries for month. Purchase groceries for the month and then make sure you do not purchase any product. This is a golden rule to save the money.

Spectacular Negotiation Skills: Please make sure that you are negotiating rates well, while making purchase of any goods/services. Go to shops/supermarkets offering good discount on products. Check out the coolest offers and purchase products. Having a coupon booklet can do wonders at this juncture.

So, I would say that above mentioned skills plays a yeoman role in saving lot of money.

Are You Finding difficulty in managing your Personal Finance.

Want to learn More about Personal Finance.

Leave A Missed Call @ 022-62116588

(Or) Visit: www.moneymindz.com

Layman Guide To financial planning

India First Free Online Financial Advisory Portal, India First Free On-call Financial Advisory Portal, Best Free Financial Advisory Portal 

If there is one reason why some individuals are more successful with their finances it’s because they are acting on the right financial planning tips. And the best financial planning tip out there is – start early before it gets too late.

When it comes to doling out financial planning tips, there is no one bigger than Warren Buffet – the highly regarded investor guru.

When asked in a TV show about ‘the biggest mistake we make when it comes to money’, this is what Warren Buffet had to say:

“Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick.”

When it comes to saving there cannot be a bigger mistake than postponing investing. Individuals often underestimate the importance of time in amassing wealth. They assume wrongly that they can always make up for lost time in the future.

So if you are looking for financial planning tips, look no further than these three ideas.

The Sowing stage 

Yes, you are in your mid-20s and have just received your first salary. To start thinking about retirement right now does sound like a bit of a drag. But starting early allows you to save that little bit more and with smaller amounts as well.

The ability to save at this stage is higher as you have little or no responsibilities. So, channelizing a part of your newfound cash flows into a retirement corpus is just ideal. Also, it is a big help at the latter stages when the responsibilities are more.

Accumulation stage

Upon marriage, consider adding term life risk cover policies for income protection. Also, start planning for a house, if you need one. A housing loan at this juncture will be not a burden as expenses are still not so high. Once you have children, expenses are sure to spiral.

Also, this stage is initially marked with marriage and then with children. With children, you will need to start investing towards their education and marriage as well. This is one of the most financially challenging periods in one's life, since demand for expenses as well as need for investment for various goals is at the highest point.

Empty nesters

As you approach 50, the situation could have taken a dramatic turn. The children might have left to complete their higher education elsewhere. And to fund this, you would have started drawing out from their education corpus.

Since investment for children's education goals have ceased, you can use the extra sum to retire any existing loans. Moreover, this an opportune time to take a final call on your retirement plans and other goals post-retirement.

Harvesters

You have retired now. And there are three important things that you need to keep in mind; regular income, capital protection and liquidity.

Accordingly, put a large part of your retirement corpus into fixed income instruments, like senior citizens' savings scheme, bank fixed deposits or fixed maturity plans of mutual funds. If you want an equity exposure, it should be marginal, through monthly income plans or balanced funds.

Are You Finding Difficulty In managing Your Financial Finance.

Leave a Missed Call @ 022-62116588. 

(Or) Visit : www.moneymindz.com

(Or) Download Financial Freedom App

Funds Required in a Portfolio

Well, my answer is ‘it depends’. Do not be disappointed. If you knew the factors that determine the number of funds, you need to hold, you will likely have the answer yourself. So, here’s what you need to take into account before choosing the number of funds to hold in a portfolio.

The amount

While this is not the first thing to influence your decision, it is the most practical point to consider when investing, especially by small, retail investors. If you had Rs. 1,000 or Rs. 2,000 to invest every month, you cannot possibly have an asset balanced, category allocated, and style-diversified portfolio of funds. It leaves you with an option of one or two funds at best. When you have a single-fund portfolio, it is a good idea to get this right: one, the choice (debt or equity fund) of asset class based on your period; two, if it is an equity fund, do not hold a mid/small cap, theme, or international fund as the one fund you hold. Often times, this is one reason why many first-time investors are disenchanted with mutual fund investing. They would have chosen a risky fund to begin with, and would have probably burnt their fingers in a down market. If you have a higher sum to invest – say Rs. 5,000 or above, then arises the question of asset allocation and diversification.

Asset allocation

If you need to allocate across asset classes, then you may need 2 or more funds, unless you think a balanced fund would suffice. If you are investing in a portfolio with a specific goal in mind, then ensure you have a proper asset allocation based on the goal and time frame. If you are clear that you have already allocated certain sums outside of mutual funds for certain asset classes like debt or gold (say deposits or physical gold) for the said goal, then this might be a less significant factor to consider. Otherwise, asset allocation helps capitalise the returns across various asset classes, while acting as a hedge against the other assets. Once you decide the proportion of equity, debt or gold to hold – the next requirement would be to decide how many funds to hold within each asset class.

You may like : Commodity Futures Markets in India

Diversification

Now, this is key. If you are an investor who does not think you need a portfolio diversified across market cap or different styles of investing, then holding one or two diversified equity funds, and perhaps an income fund for debt may suffice, provided you are a long-term investor. Of course, when you have a concentrated portfolio, make sure you get the funds reviewed at least annually as the risk profile of your portfolio would be high as a result of taking fewer bets.

For more contact Moneymindz, the best free financial advice.

Leave a missed call @ 022-62116588

(or) Visit www.moneymindz.com 

(or) Download Financial Freedom app

Know to conquer the biggest money fears.

India First Free Online Financial Advisory Portal, India First Free On-call Financial Advisory Portal, Best Free Financial Advisory Portal

Money brings up all kinds of emotions within us. But the one that is more or less constant throughout and among many people is ‘Fear’. We fear to talk about it, earn too much, earn too less etc. Fear is deeply seated in our genetic drive to survive – this cannot be speedily wiped away with facts and figures.

We as a financial planner understand that – also how these emotions influence our financial decisions. In the beginning of financial planning process, we do few exercises with our clients to understand these emotions & stories behind these emotions – our punch line says “understanding people before numbers”.

6 Money Fears & how to overcome

1) I will lose all my money

We work hard to earn money and always want to save more and earn more. Many of us lose money too due to a bad investment, wrong decision or inflation. But this is something we are forever scared of and always have nightmares of investments going wrong or getting cheated of our money. We are scared to take money decisions as we are scared that the decision will make us lose all our money.

2) I will lose my job

Companies are very competitive and always look for ways to increase profits and reduce costs. One way to reduce costs is to ask employees to leave the company. During recession and tough times, they might lay off people. We cannot be constantly scared of this as this might make us anxious and affect work performance negatively.

Instead of being worried about getting laid off, it is best to work efficiently. It is important to blend in the culture of the organization that one is working in. It is important to take up new responsibilities, additional responsibilities and also upgrade one’s skills so that in case of extreme situations, one can get a new job or a different role in the organization. Building emergency fund can also add some confidence.

3) I will never have enough money

We are always worried if we will outlive our wealth. We feel we will never have enough money considering increased life expectancy and medical emergencies of old age. But this is again irrational.

We should make a financial plan in which we set up the retirement goals. The retirement goals should be such that we know how much money we need to sustain the lifestyle that we need and other goals that we might like to achieve when we retire. We should then work on executing the financial plan so that we have enough #money. The financial plan should be reviewed regularly and tweaked if necessary.

4) I will make mistakes while managing my money

We work hard to earn money and therefore are very scared to lose it. We let the money lie idle in the savings bank account thinking that we might make bad investment decisions which will lead us to lose money.

Instead of worrying like this, we should take steps to increase our financial and investment knowledge. We should take small steps in investment. We should start off with zero or low risk investments and then graduate to more risky investments. At the same time, our investments should march our risk taking ability from an emotional and financial perspective.

5) My online financial identity will get stolen

Today we do a lot of money based transactions online. We use credit cards often. This leads to the fear of getting our accounts hacked or credit cards duplicated. This is not irrational as the number of cyber crime cases are increasing but we can take steps to secure our online financial life.

We should not share usernames and passwords of online accounts with others. We should monitor financial statements regularly so that if a fraud is committed, we can act quickly. We should update our contact numbers and address with the bank and not click on suspicious links. We can control the security of our online financial transactions.

6) I am scared of talking about money

We are superstitious when it comes to money. We also don’t think rationally many times when it comes to money. We feel we will lose money if we talk about how much we have. We feel others have too much or too less compared to us and don’t want to talk about it. We feel ashamed to talk about bad investment choices.

But it is important to talk about money with people whom we can trust. Married couples should talk about money, money habits and money choices so that both are aware of how much money is there and how much is needed and what can be done to improve the finances. You can take advice from your parents about managing money as they may have gone through situations that you are facing at different stages of life.

Fear is a strong emotion and too much of it can hurt your frame of mind. It is important to think about money and be aware of various possibilities that can happen to our finances but instead of being scared about them, one should plan the finances and take the right steps to be financially secure.

For more information, contact Moneymindz, the best free financial advisory service.

Leave a missed call @ 022-62116588

(or) Visit www.moneymindz.com

(or) Download Financial Freedom app

Are you ready to give smart moves to your appraisal?

Your appraisals were probably done April. Some of you got good ones and some maybe not so good. It’s been more than a month now. You are probably back to your daily work routine and impressing the boss is probably not high on your agenda right now.

Whether you got an appraisal or not. Have you given your money same appraisal?

Why should you bother giving your money an appraisal?

Apart from the sheer joy of work, the other thing that drives us to the office every day is the salary we receive at the end of the month. And just as your work assessment will have elements of current performance & future potential, your money needs to be looked at with multiple lenses.

Your money is not just meant for your expenses today, but also for all the tomorrows that you will wake up to. The person who wakes will keep changing as an individual, getting older, wiser, smarter, and more responsible.

This change means that what you earn, and save, today needs to change with you.

Let’s take some smart moves for your annual bonus

Get ready for an emergency

Experts recommend maintaining an #emergency_fund to handle your fixed and variable expenses through a period of six to eight months. This emergency could be a loss of employment, a medical problem, an accident, damage to property, and so on. While many of these situations can be covered with insurance, it helps to have liquidity in an emergency. Basically, you must assume that there could be a situation in your life where your ability to generate a monthly income could be impacted. This is where your emergency fund would cover you.

When you get your bonus, have a look at your spending patterns over the last six to eight months. Evaluate the size of any existing emergency fund you may have and if it would have helped you get through those months. If not, you may want to top up the fund. The ideal instruments for creating an emergency fund would be recurring or fixed deposits, liquid mutual funds, and debt funds.

Pre-pay your loan

We’re at a time where it’s advisable to pre-pay on your loans. The interest rates seem to have bottomed out; loans are also being offered at low interest rates. The yield on fixed income instruments such as bank deposits has also reduced. Therefore, having surplus income now is a great reason to reduce your loan balance through principal pre-payments. This has the potential to significantly reduce your interest payments in the long run. You may divert some of your allocation towards bank deposits towards pre-paying on your loan.

Doing this would not only reduce your long-term interest payments, it will also help you in the short term at any point the interest rates start rising again. Having made a pre-payment, the rise in EMIs would not pinch you as much.

However, if you’re nearing the end of your loan tenure, you may want to avoid pre-paying in order to maximise your tax savings through your home loan principal and interest payments.

INVEST IN SIP

Keeping the volatile market conditions in view SIPs are the best investment options for the average investor who does want to take risks. Starting a SIP in equities can yield decent returns over a long period of time. The smartest means to use this lupsum amount is to acquire debt funds with the amount and then start a SIP for equity funds with the same mutual fund company. This will provide security as well as growth which most of us look for in our investments.

Check Your knowledge on stock market

ENHANCE INSURANCE COVER

The right amount of insurance cover that will cater to the needs of your family in times of need is a fluctuating figure depending on various external factors beyond your control. The cover amount must be periodically reviewed to make it meaningful in terms of security it accords. When you get a bonus, it is the ideal time to review the cover and buy fresh cover with the surplus money in case you feel that the existing cover is inadequate

Reassess financial goal

Investment should be aligned to your financial objectives. When you get surplus income with your annual bonus and appraisal process, reassess your financial goals once again, and provision at least a part of your bonus towards those goals. With this increased allocation, you may be able to achieve those goals in a quicker time-frame.

What about your enjoyment?

You can distribute your bonus fund smartly between all your financial needs, and you can still allocate something towards your wants such as a holiday, or buying a car or new cellphone. Proper distribution of funds on the basis of financial priority would ensure that the money is not wasted and you are not deprived of the securities needed to enjoy life.

For more information, contact Moneymindz, the best free financial advisory service.

Leave a missed call @ 022-62116588

(or) Visit www.moneymindz.com 

(or) Download Financial Freedom app

Why Financial Literacy Matters ?

India First Free Online Financial Advisory Portal, India First Free On-call Financial Advisory Portal, Best Free Financial Advisory Portal

Financial literacy means having a basic understanding of how money works. Understanding how to manage money will helped to turn your finances around. Instead of always being the red every month, you should have tangible assets, investments and don’t live pay cheque to pay cheque. You can find yourself completely new person, in the financial sense. The good news is that it’s not hard to learn about financial literacy; you just have to know where to look!

A switch went off in my head years ago. I realized that knowledge is power and set out to learn as much as I could about personal finance, particularly getting out of debt. The more you know about a topic, the better decisions you can make for your family. I made it my mission to become financially literate.

Here are some reasons why I think it’s important to understand money:-

Spending versus saving

Over time, your savings can make a large difference in your future financial lifestyle. Paying attention to how you spend your money will reveal opportunities to cut back. However, savings should be the money you set aside before you spend. In short, you need pay yourself first. Make it easy by setting up automatic contributions from each paycheck to your retirement savings account.

Thinking of personal savings as the first bill you pay is an easy way to help build your savings gradually. If you are consistent, no amount is too small to make a difference. Regular contributions also help you take advantage of compound interest.

Increases your confidence.

When you used to feel stressed out with anything financially related. You may relied on other people to tell me what to do. Now, as an informed consumer, you should better in the choices what you make. If you want to compare you options .You can easily check with moneymindz.com our goal is to give people Unbiased advice on any financial products.

To Expert advice on any financial product leave a missed call @ 022-62116588 or visit Moneymindz.com

Teach your kids. 

As parents, it’s up to us to teach our children how money works. This way when they do venture out on their own, they don’t have to learn the hard way! Usually parents teach a little bit. But knew money was a finite resource with our dad’s common slogan, “Money doesn’t grow on trees”. Usually we have zero inkling about debt and its consequences.

Help in Financial decision-making

Figuring out which investing strategy works for you can be intimidating, as the investments you choose help determine whether or not you achieve your financial goals. But before you randomly make choices, take some time to think about your risk tolerance -- that is, your ability to withstand swings in the value of your investments. Your risk tolerance should take into account your specific goals, your time horizon for each goal, your additional financial assets, and the stability of your job. Revisiting your risk tolerance as your circumstances change is important to help ensure your portfolio is best suited for your situation.

Better quality of life. 

Understanding your finances means less stress. You’ll always know where you stand financially and you have a plan in place to reach your goals. You may have hated feeling confused about where your money is going and felt like you never would have enough to cover my bills. By taking control of your finances through budgeting and learning about money, you will be in a better position now to handle whatever life throws in your way. You will not feel like you are not in the dark anymore.

Final Words

It is never too early or too late to improve your financial literacy. In fact, if you avoid major mistakes and do some of the most basic things, you may find yourself on the road to controlling your financial future with significantly less financial anxiety.

Celebrate with us Financial Literacy week :

Check your financial Literacy score

Common money mistake to avoid after payday.

Ever you were all your money goes right after payday? 

Spending money is way too easy. But savings look extremely hard! It is very simple to save money but though it isn’t something that happens overnight, you need to work on changing a few habits. You might have your first real job and, with it, your first real paycheck. In the excitement of hitting the town every night or shopping for your first apartment, all that money can quickly evaporate, leaving you stranded until the next payday.

Mistake 1: Spending Every Penny

Here's the secret to achieving most financial goals: saving money. But you can't save if you fritter away everything you earn.

Use your dreams as motivation for some of the scrimping that lies ahead. For instance, if saving for a home is high on your list, that goal should get priority when it comes to your disposable income.

You probably have more opportunities to cut back than you realise

For example, instead of splurging on lunch at work because you have a few extra bucks, bring a sandwich from home and save the difference.

In order to make this work, you have to know how much you earn and how much you spend. Don't get nervous: Meticulous budgeting may not be necessary. Fidelity developed a 50/15/5 rule of thumb that can be used as a starting point.

Consider the following when thinking about saving and budgeting:

No more than half of an investors take-home pay, 50%, should go to essential expenses, including housing, food, utilities, and other regular obligations.

15% of pretax income should go to retirement savings—including the company match.

5% of take-home pay should go to short-term savings.

Whatever is left is spent however the investor chooses.

Mistake 2: Using Credit card rather than cash

A Credit card is something useful to have in hand because apart of having rewards point and the convenience , You also have the security that ever you lose your credit card , It can be easily replaced which is not in the case of cash. . However the trade off with credit cards is that it’s easier to overspend, which can lead to debt problems in the future.

With the convenience of a credit card, it’s easy for people to buy things they don’t necessarily need at prices they can’t afford. And if someone doesn’t pay off their credit card balances every month, not only will they accumulate debt with high interest charges, but this could eventually hurt their credit rating as well.

The solution? Learn to shop with cash, but keep a credit card for those big purchases you know you can pay off.

Mistake3: Retirement saving 

You Must Save 15% of you’re earning because it is important save of your future- No matter How Young or How Old you are?

When you’re young and you’ve just started out on your career, saving for retirement may be the last thing on your mind, when in fact doing so is just one of many money mistakes to avoid. It’s tempting to spend your hard earned money on things you can enjoy now, but in another 30 years or so, all those vacations you took and those expensive restaurant meals you enjoyed aren’t going to help you pay the bills when you’re retired.

Secure Your future by taking expert financial Advice By leaving a missed call 022- 62116588 

Or Visit Moneymindz.com. India's financial advisory portal