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Monday 17 November 2014

5 Steps for Young Couples to be Financially Stable

You can hate it, you can love it but you cannot live without it. Yes, money is arguably one of the top requirements to survive in today’s world. However, everyone seems to make money but only few of them seem to be happy with the money they make. On deeper introspection you will find that the equation is not in making money but in managing money. As the saying goes, early bird catches the worm, similarly starting early is always a good way to manage money, not only do you have more time but also you can recover in case you make any wrong decisions as well.

Keeping this in mind, I have listed out five important steps which can be taken by young couples to be financially stable & be happy.

Steps for Financially Stable Married Life
Credit : Flickr
Avoid Splurging

Everyone likes to spend money if they had enough money. Surely, money is not everything but it is definitely not wise to spend the money if you have an important bill to pay, or an EMI or a debt. Always before you spend the money do not assume that you will get that bonus or that profit you were expecting. Good days are not always here to stay and you could be in the doldrums anytime. So be 100% sure that the money you are spending is only for spending and it was not useful elsewhere. Take stock of your finances and if possible keep a separate amount for fun expenses.

Start Saving for Child

With today’s ever increasing costs raising kids no kid’s game and you got to clearly plan the expenses with respect to the future of your kids. Make sure you have saved enough money right from the medical expenses for the new born baby to the vaccinations and any other mandatory requirements for the baby like baby food, clothes, day care etc. This is not to make you feel like a miser but just to be wiser so that you don’t get off guard the next time you buy a baby powder and shocked that it costs more than your talcum powder. It always helps to be prepared and when you are prepared you always give a better performance. It only make sense as you do not want to give a stressed environment to the new born baby as well.

Go for Sufficient Life Cover

You always have to a plan B. Yes, in short who will take care of your family if something untoward happens to you? This is where you need to buy a life cover. Ideally life cover should be at least 20 times your annual income. You have to options you can go for term plans which are cheaper but give you higher coverage but do not return any profit or the premium paid as well. Make sure you know the maximum age till which your term plans cover. Term plans do not cover till the person dies after old age. All of them have age limit, mostly up to 75 years of age. On the other hand you have endowment life insurance plans which cost much higher but give you coverage till the participant is deceased or even at the maturity of the plan. So see which plan is better to you and choose accordingly.

Purchase a House if EMI below 40% of Income


Most probably sooner or later everyone likes to own a house for two reasons. One is stop paying rent etc. for the accommodation and the other is to have a stability in life in case you are going to stay, work and live in the same place. Going for home loans is a good option because you need to invest all the savings for your new home, you also get tax rebates, you only pay small EMIs and sooner or later the property you purchased is an asset. Ideally banks too would issue home loans based on 40% of your income. This ensures you have enough money for other expenses.

Get the Right Health Plan

Health is wealth. However, with today’s high cost medical facilities the saying only becomes stronger. Having a good health insurance saves you from sudden high expenses in case of a sudden health problem and also keeps you financially safe.
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