Being financially fit is a relatively new concept for most people. However, in the wake of the coronavirus pandemic, every person now understands the value of being financially fit in 2021. Life is very uncertain, and if you have not started planning and saving for your rainy days, then any and every emergency could rattle you easily.
Financial planning can ensure you do not get caught by surprise with whatever life throws at you. A comprehensive assessment of your current expenses, liabilities and assets, coupled with the goals you want to achieve in the short or long term, will help you pan out your finances easily.
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Another misconception that people often have with financial planning is that most of them think saving money or parking it in instruments with good returns is enough. However, they forget to factor in the rising cost of health and medicare, and if an emergency like the pandemic strikes, hospital bills and treatment cost can alone pull you back financially for years to come. This is where insurance comes in handy, be it health insurance to take care of your medical treatments or term insurance to cover your life and financially secure your family in your absence.
Build Yourself An Easy-To-Follow Financial Plan
Strategizing and planning finances is the need of the hour and an essential part of every individual’s life. Everyone wants to continue living their lifestyle even after retirement, and if you have started saving from your early days and planned out your finances in advance, then enjoying the later years of your life stress-free will not just be a dream.
Here is how you can build yourself an easy financial plan in no time:
- Make Your Goals
Be it saving for a new home, buying a car, or simply planning for children’s education and marriage; an individual can have many goals. It helps to joy down these goals and then start saving towards each one of them, so you know how to plan your finances and which goal needs how much saved up for you to be financially fit.
2. Analyse Your Finances
Before you plan to start saving in funds, buy gold or even opt for term insurance plan, it would be ideal to know your current financial situation. Know how much savings you have to date, how diversified your portfolio is to date, your current assets, and then make your financial plan accordingly.
3. Work Through Your Debt
Saving money and investing it in different schemes is alone not enough. There is no point in earning money in other instruments when you still have impending credit card debts or loan EMIs. Make sure you plan your finances in a way that you are also clearing your debts while making an investment portfolio.
4. Plan For Term Insurance
If you are still wondering what is term plan all about and why you need to think about one, then you must know that a term insurance plan is a perfect addition to your financial plan for many reasons. You can be financially stress-free even after retirement and not worry about securing your family even in your absence.
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Consider Investment Tools
One of the major keys to being financially fit now and preparing for your retirement is diversifying your investment portfolio. Be it tax-saving tools or buying gold for future goals, you must try and invest your money in different instruments. Based on your needs and goals, you can select from a variety of investment options like debt funds, ELSS funds, Sovereign Gold Bonds, PPF, EPF, NSC, ULIP, etc.
No matter what your goals are, if you have a financial plan in place, then no goal is too big to achieve in the first place. Start early and always have this plan in your mind to stay financially fit always.
The Bottom-Line: Term Insurance Plan’s Role In Your Financial Planning
Just like savings and investments are done to build a promising future for one’s life, an insurance plan is what offers a promising future to your family even in your absence. The key to any sound financial planning is having the right insurance cover. An insurance policy, like term insurance, for example, will not only offer you an ideal life cover but ensure that your family will be taken care of financially in your absence.
Besides, other than your ELSS funds, PPFs and other tax-saving instruments, the Income Tax Act of 1961 also counts premium against a life insurance policy in that list. You can easily claim a deduction and save your taxes every year by showing your insurance premium.
Experts recommend getting insured and secured in time before starting to invest. Once you have sorted that aspect of your life, living the rest of it stress-free and enjoying it to the fullest will no longer remain just a dream.
