A good management of money always delivers a security in life. Though you must have been planning your investments after a through financial planning to protect yourself from any financial hazards which may happen in your personal life, isn’t it? But what will happen when things happen beyond your control, for e.g. a global slow down? Lets understand how you can protect yourself from any emergency beyond your control: –
- Emergency Fund: An Emergency Fund is that part of your savings; which is kept untouched. It should ideally cover up your basic needs for 6 months and can be created with SIP or with any bullet payment you received (yearly bonus or maturity of existing investments)
- Continue with Routine Investment: As per your budgeting and after eliminating the debts, continue with your regular SIPs, monthly investments and savings to create a corpus.
- Diversify the portfolio: Don’t put all your eggs in one basket, you need to create a well diversified portfolio consisting of all the assets class.
4. Get out of Debt: The financial crash leads to recession and impact your earnings, job security or business prospects. You need to raise debts only for the essential priorities and should also budget a space for 4 months for servicing your debts without compromising on your basic needs in case of any emergency.
- Medical Expenses: A good health can create a wealth and if you are in your late 30s, you are still in good position to go for a Mediclaim policy for your family. Medical emergencies are unexpected, unavoidable & nobody even wants to think about it; but this is right time to think on the same. You need to make sure that at any point of time in your life, you have sufficient financial protection for any medical emergency.
- Monitor Expenses: Some expenses are essential while some are driven by your temptations and there is a very thin line between a necessity and luxury. It is always prudent to reduce your unnecessary expenses or delay the same. Use your credit card wisely and always remember the fact that credit card just gives you an extended time for making payment but what you pay is purely your out of pocket expense.
- Additional Income: Always try for an additional income specially in this era of Global-local market , there are many opportunities which are available for doing a side business, freelancing. Your hobbies or other passion may also earn extra money, think out of box and take the benefit of an era of Internet which has made it very easy for marketing your talent and ideas very easily.