65 Personal Finance Tips

While we are a free country and very democratic in almost every walk of life, how many of us can say with confidence that we have attained financial freedom as well ? Money helps us sustain our daily living yet most of us struggle with basic personal finance decisions and healthy financial planning. So, few personal finance tips for you.

On 65th Independence Day, here are 65 personal finance tips to help you Master Your Money and attain Financial Freedom.

1. Have a core portfolio in place.
2. Learn personal finance basics so that it helps you master your money.
3. Start saving money for your future today rather than waiting for a time when you think you will earn enough to save. That day is today.
4. Insurance is meant for risk protection only, not for investment.
5. Follow goal based investing strategy. Without a goal in life, one is a blind man in a blind world (borrowed from my favourite Alistair MacLean). Define your goals today.
6. Be a co-guarantor if you can pay for the loan should the actual borrower abscond.
7. Discuss money with your spouse.
8. If you do not have a house, buy a house to live in than as an investment.
9. Have a maximum of 1 or 2 credit cards.
10. Understand and accept that beyond real estate, there are other investment avenues that you must take an exposure to.
11. Do not roll over your credit card bills to the next month. Pay it each month and move on.
12. Nothing in life is for free, nor is financial planning advice from a qualified financial planner.
13. Do retirement planning today, don’t depend on your kids to support you financially.
14. Match your employer’s investment in EPF by the same amount.
15. Remember ULIPs also stand for Unwanted Loopholes In Pockets.

16. File your income tax returns in time.

17. Buy a term insurance plan and avoid other insurance policies. Your family needs the resources to live their dreams when you are not around.
18. Do not take a personal loan come what may.
19. Stay from the stock market on a daily basis. It’s the only place where you pay for advice and lose your money.
20. Buy mediclaim or health insurance for you or your family.
21. Endowment insurance plans are not the most efficient investment vehicles.
22. Remember you could still have a Satyam in your portfolio today. No one can find out that for you. If they could, they would have found out about Satyam before it went down.
23. Brokerage houses, banks, insurance companies, your life insurance agent, the income tax consultant and your financial planner, everyone wants to earn money. You need to think and decide who is on your side.
24. Check your CIBIL report to make sure others who think they know about you, really do correctly.
25. Assess your EMI paying capacity before taking on any kind of debt or loans.
26. You cannot make short term money in real estate ever. If you have in the past, consider yourself  lucky.
27. 30 minutes with India’s top personal finance magazines or your finances is better than 30 minutes of “Bade Achche Lagte Hain”.
28. Form an emergency fund. They come only when you are not prepared.
29. Review and monitor your financial plan each year.

30. Keep your insurance agent at bay. It’s time for your financial planner to move in.Some more personal finance tips

31. Start with the (100-x) rule on investing, improvise as your learn more.
32. Take critical illness cover if you think there is a slight chance of it happening.
33. You actually made losses by day trading. If you are not speaking about it, it is because you are ashamed to admit your mistake to others. Don’t be a trader, be an investor.
34. Create passive sources of income if you want to become financially free.
35. Stocks and equity diversified mutual funds return the most over a long period of time. You are doomed if you do not take exposure to them.
36. Systematic Investment Planning of mutual funds are the 8th wonder of the world and your best bet to make money from the stock market.
37. Housing in India is never going to be cheap so don’t look for rates to go down to buy one if it is your first house. Buy today.
38. Moneyback insurance plans do give your money back but only when you do not need it. Avoid them.
39. Invest in Public Provident Fund (PPF) – it is one of the best fixed income instruments available today.

40. Do not have a huge amount of money lying idle in your savings account.

41. Research for the best car loan before you get sweet talked into taking one from the showroom.
42. Save your income tax, why pay the government when all it goes to is scamsters !
43. Stick to your asset allocation – it’s your pillar to getting rich.
44. Replacing your laptops, iphones, mobiles, ipads and cars each year is detrimental to your financial well being.
45. Insure your home of its content, belongings and structure – take home insurance.
46. Teach your kids to be finance savvy and the difference between needs and wants. They will be better finance-informed individuals than you.
47. Track your monthly income and expense, use monthly budgeting tools for the same.
48. Clear off the bad loans (credit card and personal loans) first. Keep the good ones.
49. Invest in gold each month, it’s a good hedge against inflation.
50. Highest NAV guaranteed insurance plans and child saving insurance plans are best avoided.
51. Appreciate and understand that inflation can become the ugly show stopper in your goals.
52. Do a annual health check up if you are beyond 30-35.

53. Know your risk tolerance.

54. Get yourself personal accident insurance.
55. Debt mutual funds are a critical part of a your portfolio for balancing when the time comes.
56. Having physical gold is self satisfying but Gold ETFs unfortunately are a better means of investing in gold. Invest at least 50% via Gold ETFs.
57. Avoid investing in the stock market based on your best friend’s tips. And the brokerage houses. Do your own study. That way, you can blame only yourself.
58. Keep your loans less than 40% of your net take home.
59. Invest at least 25% of your net take home.
60. Spend wisely – there are discount at malls and Goa can still happen off season. Controlling spending is a critical achievement.
61. Know basic figures like how much per month is needed to save for retirement and children’s education.
62. Take mediclaim for parents – the government gives you tax breaks on this.
63. Do a quarterly analysis of whether your annual investments are on track – if they are not, you cannot meet your goals.
64. For all things for which you need money in the next 3 years, keep the corpus in debt and not equity.
65. Get the holistic picture of your financial plan. Get a financial planner – get in touch with TheWealthWisher Financial Planners today.

Have a Happy Independence Day friends !