Thumb Rules of Financial planning...

Thumb Rule of Financial planning.

1. 30 % of your income must be used for monthly living expenses.

2. 30% of your income must be used for Liabilities repayments, if any..

3. 30% of your income must be SAVED and INVESTED for your future LIVING.

4. 10% of your income must be spared for entertainments, vacations

5. 6 months expenses must be available for emergency fund (should be invested in LIQUID FUND, FD Etc)

6. Home loan can be registered and apply on both husband and wife name. (Both can get benefits on Home loan Tax benefits)

7. Buying second house for investment is not advisable ( Survey reports - it will fetch you only around 3% return)

8. After 45 years of age, not supposed to enter into any BIG LIABILITIES (Higher education of children and wedding of children will happen around 45 to 50 only, so plan now for the same.)

9. Have joint Bank savings account.

10. Property must be registered on both Husband and wife name. (As per legal act – after husband first legal heir is wife, after wife it will go to children only)

11. Regular check on Nominations at all financial instruments. if not nominated, do it now..

12. Only in insurance policy, Claims payable to Nominee. In other financial instruments legal heirs certificate is must to get back the settlement

13. Must have Term Insurance to financially secure future of your dependants..

14. Don’t take any financial investment decisions EMOTIONALLY,  and also Avoid last minute tax saving investment decisions, plan well in advance..

15. MEDICLAIM is a must (in spite of Group mediclaim coverage given at office) (After retirement there is no mediclaim coverage, after 50-55 years of age, it's very tough and costly to enter into mediclaim)

16. For your jewellery LOCKER, Only one lakh is payable by bank, if theft or fire happen at bank. Provided insurance done.Preferably keep your valuables in 2 or 3 locker in different places.

17. Like same way Government guaranteed only one lakh for your FD also. (Fixed deposits with Banks upto Rs. 1 lakh only are backed by deposit insurance)

18. Must know all Tax implications. You cannot avoid paying tax. But you can minimize by way of tax planning and investments..

19. All financial documents must be kept safely and keep family members informed of the same..

20.Write a will.Preferably register it.It avoids a lot of complications regarding inheriting your hard earned/hard saved wealth after your days in this earth.

#These are general suggestions, personal Finance and investment decisions depends upon case to case.

Common Money Mistakes We Should Avoid...

These tips are not for the super rich...But for ordinary folks who would like to build a tiny nest egg for their future....

Try avoiding these mistakes and you will find that you have already saved a tidy heap!!!!!

1. Lavish celebrations of family functions like weddings ,engagements ,birthdays etc. even if you cannot really afford.

2. Impulsive buying of costly things even if you dont really need them.

3. Taking a loan just because it is offered.

4. Buying things that depreciate in value(eg.electronic wares) as soon as they enter the market.

5. Taking a loan on high interest for anything that does not have a appreciable resale value.

6. Not maintaining regular accounts.

7. Not making savings a regular habit.

8. Standing as surety or guarantee for someone else's loan commitments.

9. Spending a lot on rentals when you can pay the same as an EMI for your housing loan + avail tax benefits.

10. Not taking medical insurance .

11. Frequently exchanging gold jewellery for the latest models and fashions.

12. Not making proper tax planning well in advance.

13. Living up to the Joneses.

14. Making an investment impulsively, without proper enquiries about the documents/legal aspects.

15. Putting all your investments in one place.(put your eggs in various baskets)