Retirement Planning: Finally, retirement planning is crucial\u00a0to make sure\u00a0that you simply\u00a0have\u00a0an enormous\u00a0bank balance meant solely for your needs during the twilight years.<\/li>\n<\/ol>\nAnd now,\u00a0we are going to\u00a0discuss each of the 5 aspects in further detail:<\/strong><\/p>\n<\/span>SAVINGS<\/span><\/span><\/h3>\nThe need for sudden money can come anytime. It will be similar as to any car breakdown or in some serious situations as losing job. However, such emergency events\u00a0are\u00a0addressed\u00a0if\u00a0we’ve got\u00a0enough savings\u00a0to cover\u00a0the requirement. Thus, as a rule of thumb, one must have sufficient funds, in order to pay off emergency needs, for a period of three\u00a0to six\u00a0months.<\/p>\n
Debt instruments in the form of Liquid Funds have been considered as an excellent option for investing for emergency needs. Therefore the\u00a03 reasons to back that thought:<\/p>\n
\n- First, liquid funds give slightly better returns than your\u00a0bank account,\u00a0while\u00a0there’s\u00a0no guaranteed return.<\/li>\n
- Second, these funds are highly liquid, hence\u00a0you’ll be able to\u00a0withdraw\u00a0the money\u00a0after seven days.<\/li>\n
- Third, they are not associated with any credit and interest risk, and therefore are seen as safe heavens.<\/li>\n<\/ul>\n
<\/span>INVESTMENT<\/strong><\/span><\/span><\/h3>\n![\"\"](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/08\/personal-finance.jpg\")
<\/h2>\n
It is commonly seen, that people tend to confuse investing with saving, or hence, consider them as synonymous. However, in reality, saving is about setting money aside, but investing is putting money into purchasing of assets like \u2013 stock, bond, mutual funds etc. So as\u00a0to create\u00a0your money grow. Now talking in terms of investment, mutual funds are\u00a0a wonderful\u00a0investment option if\u00a0it’s\u00a0done right. However, while investing in mutual funds\u00a0it’s\u00a0essential to be mindful about choosing\u00a0the correct\u00a0fund for your investment, otherwise\u00a0it would\u00a0turn counterproductive. Hence,\u00a0it’s\u00a0essential\u00a0to form\u00a0your investment as per your investment requirement and horizon.<\/p>\n
So, the rule of thumb is that, it is important to turn your dreams into financial goals and set a timeframe to achieve the same. Then pick an investment trust that matches your investment timeframe.<\/p>\n
<\/span>FUNDS AS PER GOALS<\/strong><\/span><\/h3>\n\n- Short term goals: The goals\u00a0that require\u00a0to be achieved within three years are short term goals. From saving for\u00a0a visit\u00a0to saving for a phone, there are multiple things\u00a0that\u00a0one\u00a0must\u00a0arrange funds within this timeframe.<\/li>\n<\/ol>\n
Best Alternatives: Liquid Funds and Ultra short-term funds.<\/strong><\/span><\/p>\n\n- Mid-term goals: If\u00a0you have got\u00a0set a goal for yourself that\u00a0must\u00a0be achieved within three\u00a0to 5\u00a0years,\u00a0for instance\u00a0down payment for a house, it\u00a0is often\u00a0termed as mid-term goals.<\/li>\n<\/ol>\n
Best Alternatives: Hybrid Funds, ELSS, Short Term Debt funds like Banking and PSU Debt Funds<\/strong><\/span><\/p>\n\n- Future\u00a0goals: Milestone events like retirement, children education, their marriage, i.e. the goals\u00a0that\u00a0the timeframe is minimum of 5 years are termed as\u00a0long-term\u00a0goals.<\/li>\n<\/ol>\n
Best Alternatives: Multi Cap Funds, NPS (only for retirement),\u00a0large cap\u00a0Funds<\/strong><\/span><\/p>\n<\/span>FINANCIAL PROTECTION<\/strong><\/span><\/span><\/h3>\nWe might weave several dreams in life\u00a0and make\u00a0investment plans\u00a0to show\u00a0those dreams into reality. But unless we protect them with\u00a0a security\u00a0net,\u00a0the same\u00a0can\u00a0become\u00a0a liability. That safety net is insurance.<\/p>\n
TYPES OF INSURANCE<\/strong><\/span><\/p>\n\n- Term insurance: It is\u00a0a sort\u00a0of\u00a0insurance\u00a0that ensures that your family or dependents\u00a0don’t\u00a0must\u00a0undergo\u00a0financial hardship if you die early. As compared to other\u00a0insurance\u00a0products, the sum assured for\u00a0insurance\u00a0is higher as against the premium amount.<\/li>\n
- Insurance\u00a0and Significant\u00a0Illness Insurance: Having\u00a0insurance\u00a0ensures\u00a0that you simply\u00a0don’t\u00a0need to\u00a0pay from your pocket\u00a0just in case\u00a0you or any of your\u00a0members of the family\u00a0have taken ill.\u00a0Insurance\u00a0covers all costs for treatment of the insured like hospitalization, medication, pre and post hospitalization expenses etc. Meanwhile\u00a0you’ll be able to\u00a0go for\u00a0critical insurance\u00a0together with\u00a0your basic health policy.\u00a0just in case\u00a0you’re\u00a0diagnosed with\u00a0one among\u00a0the critical illnesses mentioned in your policy, the\u00a0insurer\u00a0can pay\u00a0you the sum assured.<\/li>\n
- Mortgage Protection Insurance: it basically pays off towards the mortgage where the mortgagee dies during the tenure of the mortgage. Thus, it ensures that the loan or mortgage, doesn’t\u00a0become a liability for your family,\u00a0just in case\u00a0you die early.<\/li>\n
- Personal Accidental Insurance: In case you meet with an accident\u00a0and find\u00a0seriously injured, or become partially or fully injured, the\u00a0insurance company\u00a0pays\u00a0the sum assured\u00a0to cover\u00a0the expenses for treatment and also loss of income. Meanwhile, if you die during the accident, the lumpsum amount\u00a0are\u00a0paid to your family. The payable amount, however,\u00a0relies\u00a0on the fatality of the accident.<\/li>\n<\/ol>\n
<\/span>TAX SAVING<\/strong><\/span><\/span><\/h3>\nThough we are required to pay taxes as per tax slabs, with\u00a0the proper\u00a0kind of\u00a0investment\/purchase\u00a0we are able to\u00a0reduce our taxable income to\u00a0a particular\u00a0extent. In fact, there are as many as 70 exemptions and deduction options through which\u00a0we are able to\u00a0bring down our taxable income.<\/p>\n
Here are\u00a0the two\u00a0most well-liked\u00a0sections for deducting taxes:<\/strong><\/span><\/p>\n\n- Section 80C: the largest pool for tax deduction is Section 80C. Under this section, you’ll claim deduction up to Rs 1.5 lakh for creating various investments and expenditures. Some of the prominent tax saving instruments are EPF, PPF, NSC, NPS, ULIPs, Children\u2019s Tuition Fee, Insurance Premium, 5-year Tax Saving FD, ELSS, Senior Citizen Tax Saving Instrument, Sukanya Smriddhi Yojana, Home Loan Principal amount.<\/li>\n
- Section 80D: Also,\u00a0you’ll be able to\u00a0claim deduction under Section 80D, for the premium amount you\u00a0pay for\u00a0your and your family\u2019s\u00a0insurance\u00a0policy.<\/li>\n<\/ul>\n
Apart from these two, there are other avenues\u00a0to cut back\u00a0your taxable income, to\u00a0understand\u00a0them read: Beyond Section 80C: 10 ways\u00a0to save\u00a0taxes.<\/p>\n
RETIREMENT PLANNING<\/strong><\/span><\/p>\nRetirement is\u00a0one amongst\u00a0the foremost\u00a0crucial life stages, and it\u00a0may be\u00a0as blissful or as miserable depending upon how\u00a0you have got\u00a0planned for it. The same holds true for financial planning as well. Now, planning finances for retirement\u00a0may be a\u00a0two-step process. First one is saving for retirement and second one is for generating passive income from personal assets after retirement.<\/p>\n
And, here are\u00a0the 2\u00a0steps \u2013<\/strong><\/span><\/p>\n\n- Step 1:<\/strong><\/span> Building a retirement corpus: Saving for retirement is crucial\u00a0for 2\u00a0reasons majorly \u2013 loss of income and increased\u00a0anticipation. Let\u2019s assume\u00a0that you simply\u00a0retire at 60 and live up to 85. How\u00a0does one\u00a0arrange to\u00a0fund your expenses for 25 years after retirement, at a time\u00a0after you\u00a0don’t\u00a0have any steady income?<\/li>\n<\/ul>\n
Plus, considering inflation, i.e. the increase in prices of products and services for normal use, your expenses are going to be much higher after retirement than it’s today. as an example, if your monthly expenses are Rs 35,000 straight away, it might be Rs 80,000 per month in 20 years, considering you’d want to take care of similar living standards.<\/p>\n
Now, building a fund as large as a retirement corpus\u00a0may be a\u00a0lifelong process. So,\u00a0the sooner\u00a0you begin\u00a0saving towards,\u00a0the higher\u00a0it’s. Investment\u00a0choice to\u00a0build retirement corpus: EPF, NPS, and Mutual Funds<\/p>\n
\n- Step 2: Generating income during retirement:<\/strong><\/span><\/li>\n<\/ul>\n
As much\u00a0because it\u00a0is very important\u00a0to make sure\u00a0that you simply are\u00a0are saving enough for your retirement while\u00a0you’re\u00a0working,\u00a0it’s\u00a0equally important\u00a0that you just\u00a0channelize that corpus correctly after retirement. Making\u00a0the correct\u00a0investments will\u00a0make sure that\u00a0you have got\u00a0a gradual\u00a0income as long as\u00a0you reside.<\/p>\n
Some of the options for generating income after retirement are – STP withdrawal\/transfer from Mutual Funds,\u00a0insurance\u00a0annuity and\u00a0income.<\/p>\n
Being in control of finances and having the ability to make life choice without any concern of money, have been assumed to be the toughest objective of life.<\/p>\n
<\/span>PERSONAL LOAN: A WAY OF FUNDING TEMPORARY MONETARY NEEDS<\/strong><\/span><\/span><\/h3>\n![\"P](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/08\/P-F-.jpg\")
<\/p>\n
Borrowing money becomes essential on several occasions in life be it a medical emergency, buying a home, or a\u00a0latest brand-new\u00a0car. Well,\u00a0to take\u00a0off our needs and requirements several loans\u00a0are\u00a0designed specifically. One such loan which\u00a0we’ll\u00a0be discussing\u00a0during this\u00a0blog\u00a0is the\u00a0personal loan. The loan has been popular for a decade\u00a0thanks to\u00a0its offerings and features.\u00a0a number of\u00a0its main advantages include collateral free nature and no end-use restrictions.<\/p>\n
At the time of utmost monetary crises; many people get stressed about getting financial assistance. Among the various ways to induce assistance, personal loans always lie on top. However, for one who already has an ongoing consumer loan, availing a top-up loan remains the foremost affordable and convenient option. Banks tends to easily approve such a loan, since they are already in receipt of the customer\u2019s documents and credit history.<\/p>\n
MEANING<\/strong><\/span><\/p>\nA top-up\u00a0loan\u00a0could be a\u00a0facility provided to\u00a0the present\u00a0personal loan\u00a0holders\u00a0to increase\u00a0their borrowing.\u00a0this is often\u00a0indeed\u00a0the most effective\u00a0option for emergencies\u00a0because it\u00a0doesn\u2019t involve any documentation and takes\u00a0little\u00a0time for the loan amount\u00a0to urge\u00a0disbursed. A top-up\u00a0consumer loan\u00a0is\u00a0availed for any personal need which works in favor of the borrowers.<\/p>\n
Eligibility requirement for availing top-up loan facility –<\/strong><\/span><\/p>\n\n- A clear\u00a0chronicle\u00a0for the payment of ongoing personal loans.<\/li>\n
- Job stability<\/li>\n
- Good CIBIL<\/li>\n
- The borrower is required to have paid the minimum number of EMI as per the lender eligibility criteria. Generally, the said number is of 12 EMIs.<\/li>\n<\/ul>\n
ADVANTAGES<\/strong><\/span><\/p>\n\n- Quick Disbursal\u2013 A top\u00a0informed\u00a0a private\u00a0loan gets fast approval and disbursal\u00a0because the\u00a0applicant has\u00a0experienced\u00a0the same\u00a0loan process for his first\u00a0loan. Moreover,\u00a0the connection\u00a0between the lender\u00a0and therefore the\u00a0borrower\u00a0isn’t\u00a0a new\u00a0one. So it takes less time for the borrower\u00a0to try to\u00a0the verification. This makes top-up personal loans best for emergencies where you don\u2019t have time\u00a0to travel\u00a0through the paperwork and hassle\u00a0of latest\u00a0loan processing.<\/li>\n
- Collateral Free \u2013\u00a0like all\u00a0other\u00a0loan, a top-up\u00a0loan\u00a0is additionally\u00a0unsecured and hence, doesn\u2019t require any collateral or guarantor to be\u00a0secured\u00a0against the borrowing.<\/li>\n
- Multipurpose in Nature\u2013 Being an extension to\u00a0the continued\u00a0loan, a top-up\u00a0loan\u00a0offers\u00a0the identical\u00a0facility. And one such facility\u00a0is not any\u00a0limitation on the end-use of the loan amount which makes it a multipurpose loan. It\u00a0is often\u00a0used for medical emergencies, home renovation, travel,\u00a0higher education, purchasing gadgets or to fund the short-term requirements of your business.<\/li>\n
- Cheaper than Personal Loan\u2013 one among the benefits of top-up personal loans is that the lower rate. Generally, the interest rate charged for a top-up loan could be a bit below what it’s charged for a private loan. Getting it even for 1% cheaper rates makes someone save lots during the entire tenure.<\/li>\n<\/ol>\n
SHORTFALLS\/DISADVANTAGES<\/strong><\/span><\/p>\n\n- Applicable Only to\u00a0the prevailing\u00a0Customer\u2013 A top-up loan\u00a0personal loan\u00a0is applicable only to the persons who are already servicing\u00a0a private\u00a0loan with\u00a0the same\u00a0lender. So if\u00a0someone\u00a0wants\u00a0to alter\u00a0the lender, then this facility\u00a0won’t\u00a0apply to him.<\/li>\n
- No Tax Benefits\u2013 It doesn\u2019t provide any tax benefits. One can save tax on top-up loans providing the loan amount is employed within the home renovation or educational purpose.<\/li>\n<\/ul>\n
<\/span>DIFFERENCE BETWEEN PERSONAL LOAN AND TOP UP\u00a0LOAN<\/strong><\/span><\/span><\/h3>\n\n- A\u00a0loan\u00a0and a top-up loan both\u00a0are often\u00a0used to\u00a0get funds. If\u00a0someone\u00a0is already serving\u00a0a personal\u00a0loan than a top up loan\u00a0is a\u00a0better\u00a0choice to\u00a0them.\u00a0this is often\u00a0because it takes very less time to disburse a top\u00a0loan\u00a0whereas availing a fresh\/new\u00a0personal loan\u00a0can take\u00a0longer.<\/li>\n
- If the person\u00a0encompasses a\u00a0good repayment history and he\u00a0contains a\u00a0good credit score then\u00a0it’s\u00a0not difficult for him\u00a0to urge\u00a0a top-loan loan. Whereas getting\u00a0a private\u00a0loan\u00a0will be\u00a0a bit\u00a0tough\u00a0because it\u00a0has some strict eligibility criteria.<\/li>\n
- The maximum tenure of\u00a0a private\u00a0loan is 5 years, whereas a top-up loan can go up to\u00a0the top\u00a0of\u00a0the private\u00a0loan, but can only be availed only where the borrower has already made payment of minimum of 12 EMIS.<\/li>\n
- When\u00a0an individual\u00a0goes for a fresh loan, he\u00a0should\u00a0start everything from\u00a0the beginning. Researching\u00a0the most effective\u00a0lender, applying for the loan, submitting documentation\u00a0then\u00a0on. Whereas availing a top-up loan only involves\u00a0a far\u00a0smaller process, which is signing the loan agreement.<\/li>\n
- When considering\u00a0the value\u00a0of the borrowing,\u00a0a private\u00a0loan is costlier than a top-up loan.<\/li>\n
- A person is liberal to apply with any of the lenders for a private loan whereas when availing a top-up loan a borrower is restricted to use with the lender from whom he\/she has their loan.<\/li>\n<\/ol>\n
Top up personal loans are\u00a0indeed as very\u00a0effective tool to fight monetary crises at the time of emergency. However, to avail of this facility, it\u2019s important\u00a0to own\u00a0an ongoing\u00a0personal loan.\u00a0it’s\u00a0highly advisable to analyze your requirements\u00a0together with\u00a0the pros and cons of a top-up loan before taking any decision.<\/p>\n","protected":false},"excerpt":{"rendered":"
MAIN ASPECTS OF PERSONAL FINANCE BRIEF INTRODUCTION One of\u00a0the foremost\u00a0reasons we fail to secure ourselves financially is because we are unaware of\u00a0the things\u00a0that ought to\u00a0be\u00a0done for\u00a0it. We do what we feel\u00a0is\u00a0right thing\u00a0to do\u00a0but\u00a0which may\u00a0not always be sufficient. Therefore, it’s\u00a0crucial\u00a0to get the meaning and knowledge of the key components\u00a0that one must\u00a0concentrate on\u00a0while creating a road map …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[695],"tags":[860],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3857"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=3857"}],"version-history":[{"count":4,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3857\/revisions"}],"predecessor-version":[{"id":8933,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3857\/revisions\/8933"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=3857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=3857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=3857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"personal](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/08\/personal-finance-2.gif\")
<\/p>\n