Securing your family’s financial future is not a one-time activity but a continuous effort and requires proper planning. In India, many people have wrong notions about financial security; it is often equated with having enough savings to get through bad times or emergencies. However, a secure financial future is all about living a peaceful life and being able to accomplish your different goals from time to time and never face any financial hardship.
As a breadwinner of the family, you may want to ensure that you secure your financial future, right? But if you are not sure how to go about it. We list a few valuable tips to help you in your endeavour.
Prepare a budget
The first step to securing your financial future is to be wary of your expenses and cutting down on them. The best way to do that is to prepare a budget. Budgeting helps you plan your expenses more productively, postpone non-urgent expenses, and increase your savings.
How long you can postpone the expenses greatly depends on your lifestyle and resilience. However, you can be sure that budgeting will be rewarding in the long run.
Purchase adequate life and health insurance coverage
Just as it is vital to prepare a budget, purchasing a life and health insurance policyis critical to securing your financial future. A life insurance policy helps you secure your family against uncertainties. Suppose something happens to you during the policy period. In that case, the insurer will pay the sum assured to the family, and they can use it to take care of their everyday expenses and be financially independent.
Similarly, a health insurance policy helps you get protection against medical expenses/emergencies. Depending on the type of health insurance policy you purchase and its terms and conditions, you get coverage for all medical-related expenses like bed charges, pre-hospitalisation and post-hospitalisation treatment, ambulance fees, doctor consultation fees, diagnostic tests, etc.
With the rising medical cost, robust health insurance allows you to get the best medical care without worrying about the cost. Also, it helps keep your hard-earned savings safe for your future needs.
Create an emergency fund
Emergencies can occur at any time without any warning. And when such incidents occur, it invariably leads to significant expenses. For example, let us assume you meet with an accident leading to loss of income for a few months. In such a situation, you may get coverage for the medical expenses from health insurance, but what about survival and other expenses?
In such a situation, the emergency fund can come handy to get through the tough times and make up for the no-income phase. It is advisable to start building a reserve or emergency fund from the day you start earning and contribute a small amount to it every month. You must have an emergency fund amounting to at least 6-10 months of your salary at all times.
Invest in long-term plans
Once your contingency fund is in place, you must start investing in different long-term financial instruments, like an assured savings plan. These plans are a great way to save a small amount periodically, build a corpus for the future and get valuable returns in the long run.
Not to mention, by starting to invest in an assured savings plan from a young age, you can be assured that you will have enough funds to take care of your and your family’s future needs. Thus, you may never face any financial hassle and can live a financially secure life.
Now that you know how to secure your financial future and the importance of investment in accomplishing long-term goals start investing now!