1. Protect Yourself & Family: - Take Family Floater Mediclaim Policy :- we come around lots of people who claim that their companies are paying premium and covering whole family under group insurance, I fully agree with the same but what if you change the job ? what if you start a business ? Rethink the same.
2. Take A Term Policy: - many people say / believe that money paid on the term don’t comes back, but the fact is when you buy a term policy & put rest of the money in PPF or VPF (voluntary PF) / mutual fund sip. This will be a good combination then going for a Ulip or an Endowment Plans, Separate your Insurance & Investments.
3. Build an Emergency / Contingency Fund – the fund should be 6 to 8 months Expenses, you can park either in Bank FD or in Mutual Fund’s Liquid funds (now a days you can withdraw money with a single click / sms / visa debit card from mutual funds) also tax efficient.
4. Pay your Credit Card Debt & Personal Loans: - did you know Credit card charges you 30-40% interest on your credit card payment when you do minimum payments? You can clear this account to save more.
5. Contribute to PF / VPF (Voluntary Provident Fund) (for salaried People):- After PF Contribution by you & same contribution by your Employer, there is a Provision for VPF (voluntary Provident Fund) if you want to contribute more to your PF account you can do that to earn tax free 8% plus returns, very good in recent times for salary people. For Self Employed or Professional Person, contribute to your PPF & also look at Pension Plans / NPS (National Pension Scheme) from different Mutual Funds.
6. Start Your SIP (Systematic Investment Plan) : - Equities build wealth over a period of 10 – 15 years & also beats Inflation, start your equity SIP in a good 3-4 Diversified Equity Fund to build a Retirement Kitty as soon as you start earning.