“Financial Checklist in your 30’s & 40’s” by FinVise India
www.finviseindia.com
For more details on Mutual Funds, Financial Planning & Personal Finance contact us at :
“Financial Checklist in your 30’s & 40’s”
¨ Build
an Emergency Fund
Build
an emergency fund to assist with any unexpected expenses. It is recommended
that your emergency fund be equal to 3-6 times your monthly income. Keep this
emergency fund liquid in either cash or cash equivalents.
¨ Review
Your Budget Each Month
Understand
your cash flows that are coming in and going out each month. Organize your
expenses in categories including discretionary and non-discretionary spending.
Include monthly savings as a budget item.
¨ Calculate
Your Net Worth Annually
Make
a list of all of your assets and liabilities. Subtract the liability figure
from the asset figure to calculate your net worth. Ideally the value of your
assets should increase or liabilities should decrease year on year.
¨ Pay
Down Debt
If you
have multiple loans, start by paying off your loans with the highest interest
rate. If the interest rate on your loan is higher than a potential return on
investment, work to alleviate your debt rather than investing the same.
¨ Build
a Relationship with a Financial Professional
Once you
have established your emergency fund and have an understanding of your budget,
take the next step and meet with a financial professional. A financial
professional can help you develop a plan for your future saving, spending and
investing. Review your plan with a financial professional on a regular basis.
¨ Participate
in Employer-Sponsored Retirement Plans (EPF)
Does
your employer offer a retirement plan? Understand the details of the plan(s)
that are offered. If your employer offers a match, be sure to take advantage of
that “free” money. If your employer does not offer a retirement plan, do not
fear. Look at opening a Public Provident Fund (PPF) A/c with your Bank or Post
office.
¨ Review
Your Retirement Plan
Congratulations
for taking the first step and participating in your employer’s retirement plan
or funding your own Traditional PPF, NPS or any other Pension Fund. The next
step is to understand the investment options and find an allocation that fits
for you. Need help? Contact us for more details on Retirement planning and
asset allocation.
Set
a date and review your credit report each year on that date. You can download a
copy of your credit report from the official website of CIBIL after paying a
nominal fee, kindly follow the link to download your credit report.
¨ Coordinate
Asset Titling
Look at how each account on your net worth statement is titled. Is it in
an individual name, joint name, name of a trust? Confirm that each account is
titled as you desire. Look at the title on your home, mortgage and insurance
policies too.
¨ Create
/ Review Estate Planning Documents
o Will:
Where would you like your assets to go upon your death? Who would you like to
be the
guardian for any minor children in the event of your death?
o Power
of Attorney for Finances and Health Care: Who
would you like to make
Financial decisions and health
care decisions for you if you are unable to do so?
o Beneficiary
Designations: Review beneficiary designations to ensure they
are in line
with your
estate plan and personal desires.
¨ Understand
& Evaluate available options for Kids Education
o What kind of education are you planning for
your child – domestic or foreign?
o Do you know how much money would be required
for funding your kid’s education?
o Have you accumulated and aligned enough
assets to fund the education for your kids?
o
Would
you prefer to opt for education loan?
¨ Do
an Insurance Check-Up
o
Life Insurance: Look at
term life insurance for income replacement purposes. Be sure to look at
replacing income for both spouses, even if one spouse does not work
outside of
the home.
o Review
Health Insurance: Understand your deductible, your out of pocket
maximum
and any
co-pay amounts.
o Review
Home Owners or Renters Insurance: Is the coverage adequate?
¨ Understand
Potential Inheritance and/or Potential Cost of Aging Parents
It
is good to have a rough idea of the financial well-being of parents and
in-laws. Do they have a plan in place for care as they age? Will they need
assistance? Is there likely to be a transfer of wealth from one generation to
another?
For more details on Mutual Funds, Financial Planning & Personal Finance contact us at :
Phone No. 9582250638
Email id : contact@finviseindia.com
Visit our website :www.finviseindia.com
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