Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

Following are few Basic points that will help KYF (Know Your Financial Status). Do’s ü Always try to maintain 6 months salary amount in your Savings A/c – to meet Emergency & Liquidity. ü Maintain 2 Savings A/c atleast with different banks with 50:50 or 70:30 Balance of your Liquid Fund. (Jus to meet any ATM withdrawal or server issues) ü Do not keep idle funds more than Rs.1 Lac in your Savings A/c as the ROI is only 4% ü Park short term funds in Fixed Deposits of upto 90,180 Days or above based on your requirement as the ROI is between 7-9%.(Online FD placement and closure is available) ü Start investing in Mutual Funds – (Diversified-medium risk) in Systematic Investment Plan (SIP) with as little as Rs.1000 per month with long term like 3-5 years ü Take adequate Term Insurance of 6-10 times of your annual earnings. Remember in Term Plan premium will be low and benefit will be for your legal heirs(only in case of risk the sum assured is given) ü Alwa

Is Financial Management necessary for me? Financial Management is for every one who cares for money. It is  nothing but transformation from being needy to rich and from rich  to wealthy. Tips on Personal Financial Planning/Management   If you have EMI commitments,  bring down total loan EMI (housing, vehicle) commitment to a level of not more than 25% of the total income Basic life insurance cover need not be more than 100-150 times of normal   monthly  expenses. If your family has unearned income (interest income, dividend income, rental income etc) which is substantially more than normal family needs, you may not really require insurance. Choose insurance plans   with flexible options  to take care of children's needs/ health care needs/ retirement in future. You can take a simple term insurance policy or Health Plus Life combo policy to cover risk and healthcare.. Even floater health policies for all family members (even upto 80 years) are now available with term insurance