Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

Have you ever wondered how a simple housewife, from any society, can manage her household in whatever budget she has? Why do banks and micro finance institutions lend money to the woman in the household? Simple, women have inherently been better money managers on a small scale. Yet, many women, including working women, seem comfortable leaving their long-term finances and retirement planning to their fathers or husbands. On the occasion of Women’s Day, it will be worthwhile to take a look at simple measures that women could take to plan their finances for a secure future. The first and most important step is to understand her financial needs and develop a suitable plan . For this, a good start would be to calculate the inflows and expenditure and the level of savings possible. As many personal finance managers recommend, she must keep emergency funds in the form of ready cash to the tune of 3-4 times her monthly salary/ allowance . When this level is achieved, she can then take the ne...

Commandment One: Pay all credit card bills on due date in full In case you do not pay the entire bill amount on the due date, interest is charged from the date of spending, and not the due date for payment. That factor alone can push up credit rates to over 40% per annum; and this makes it probably the most expensive form of credit. Kill the credit with a personal loan if required -- and follow the discipline of no more rollover of credit henceforth. Commandment Two: Close all unnecessary bank accounts How many of us open new bank accounts with each new job, and haven’t even checked the balance in the dormant ones in the past one year? Commandment Three: Keep a maximum of one month’s expenses in the bank account As you may have realized, the bank pays interest on your savings bank account at a rate lower than that of inflation. That’s not to say that the rest needs to be invested for the long-term: I am only stating that you can earn a bit more through fixed deposits or sh...

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...