Practical, step-by-step guidance across core personal finance topics. Short actionable tips follow each topic so you can apply them quickly.
1. Present Loan Management
Review interest rates, prioritize high-cost debt, and restructure where possible.
- List all loans with rate, balance, EMI and due date.
- Prioritise repayment: high-interest first (credit card, personal loan).
- Consider balance transfer or refinancing only if fees are lower than savings.
2. Emergency Fund Management
A 3–6 month expense buffer (or 6–12 months for unstable income).
- Start small: target ₹10,000 then scale monthly.
- Keep funds liquid: savings account or short-term liquid funds.
- Automate monthly transfers to the emergency account.
3. Life Insurance
Protect family against loss of income — term insurance is often most cost-effective.
- Calculate cover = (annual income × years remaining to retirement) + debt + future liabilities.
- Prefer term plans; avoid policies treating insurance as investment unless necessary.
4. Health Insurance
Hospitalisation and critical illness protection to avoid high out-of-pocket costs.
- Choose family floater plans if it saves premium and covers needs.
- Watch for sub-limits and waiting periods.
5. General Insurance (including Motor)
Protect assets (home, vehicle) and reduce financial shocks from accidents or loss.
- Buy third-party motor insurance (mandatory) + own-damage cover as needed.
- Compare deductibles and claim experience of insurers.
6. Mutual Funds (including churning)
Use SIPs (Systematic Investment Plans) for disciplined investing; avoid excessive churning.
- Match fund type to goal (debt for short-term, equity for long-term).
- Prefer low-cost funds (index/ETF) for passive exposure; active funds selectively.
- Avoid frequent switching (churning) — costs and taxes reduce returns.
7. Equity Investment
Direct equity can grow wealth but is volatile — diversify and invest for the long term.
- Use a mix of direct stocks and equity funds; diversify across sectors.
- Have an allocation plan and rebalance annually.
8. Tax Planning and Return Filing
Follow tax saving investments lawfully and file returns on time to avoid penalties.
- Use Section 80C, NPS, and health insurance deductions where applicable.
- Keep proofs and receipts organized for easy filing.