In this lockdown period, staying inside our house is the only heroic thing which we can do to save our life and our surroundings.
“Stay Inside & Stay Safe”.|| “Respect & Follow the Government orders and measures”.
How will you spend your Lockdown time inside your house.
- Say “Thanks to yourself” in the morning to protect against this pandemic by Staying inside.
- Spend your time with your loved ones and have meaningful conversations.
- Interact with your parents.
- Play with your Children.
- Still, You have with you now is “TIME”.
How can you utilize this time as pro-active?
- Work out inside the house for 30mins in the morning.
- Indoor Walks.
- Exercise your mind through Meditation. Or Simply 10 Deep Breadths.
- Break your usual Schedule and follow a relaxing way. Means, don’t see the clock and do some activities.
- As a group of family, Cook and EAT together. (Definitely it will increase the Family Bond).
- Restrict yourself from SOCIAL MEDIA.
- Limit Media Exposure – Watching news all the day will increase the anxiety only. It is good to be aware of what’s happening but do not overload your mind.
- Make time for hobbies.
- Evaluate your Financial Situation & get to know about finance stuffs.
What can you do now to change your financial life forever?
Give yourself some TIME to think about our future life or get to know about personal finance. Plan and make yourself single-minded for the Financial Freedom.
Financial Freedom is that state of mind which can be felt when you are totally worry free about your finances.
Since you have ample time to think and make use of this lockdown period.
I have compiled a list of activities which shall be done alone or with your spouse or with your family members.
1.Count your “CASH” from the wallet and get to know the real value. This helps to spend with what actually left at your home. Distinguish the needs and wants. Use for that reason.
2.Then move on to your Emergency Funds. Are you having enough equivalent to Minimum 3 times of your monthly Salary. Suggestion is to have 6month Salary in the Emergency funds. Emergency fund shall be kept in Bank Savings account or Liquid Funds.
Read more on Emergency Funds & liquid funds here in detail.
3.Review your Medical health insurance policy and keep the Insurance contact numbers handy. Note down the important details and share it with your immediate family members. If you are not having anything rightnow, check for any online plans. 5 lakh cover takes 25k-30k approx. annually.
4.Do you own a Term Insurance? Share those details also with your family members.
Read more on here Term Insurance – Complete guide .
5.Note down your Upcoming EMIs with dates. In case if you are really not having money, you shall opt for RBI Loan Moratorium. But in case you have enough money, Pay your EMI and get rid of the Debt Trap as soon as possible. Because moratorium is just a delay without penalty not an exemption.
Check out our EMI Calculation article .
The above are the must do first activities. Next,
What steps you need to take for Financial Freedom?
1.Savings Rate :
Download your Bank Statement for the past 15months. Enter the Income and Expenses in the excel attached below. Evaluate your Savings Rate for the past 15months. Download the Excel here to evaluate the Savings rate.
Evaluate your Savings rate !
- If your Average Savings rate is Greater than 50% , you are on the right track on the Financial Freedom.
- If it is less than 50% but greater than 25%, you need to know where you have more expenses between the needs and wants.
- Less that 25%, ask yourself ,if you require to change your lifestyle and do the necessary action.
For your Financial Planning guidance, Please contact us and our team will guide you at a nominal fee.
Now from the above excel you come to know about your monthly expenses in total. Now you can begin to organize your expenses into a workable budget.
You shall use the previously attached Excel or Prepare yourself the sheet as your convienence.
Writing down the expenses in a notebook is always effective because when you write it will stay in your mind than storing it digitally.
Watch out this Excel templates for Customised Monthly Budget sheet.
3.Setup your financial life Goals with timelines.
This is the Next step of your Financial planning.
You may think now why do you need a Saving rate greater than 50%. Because, you shall reach you goals at your own pace.
What is goal timeline ?
To achieve each goal, you should set a defined period of time. That is goal timeline.
- Quick Goal –> Less than 1 year
- Short terms goals –> 1 to 5 years
- Medium term goals –> 5 to 10 years
- Long term goals –> more than 10 years
What are some Financial goals for example ?
- Getting a new mobile phone comes under Quick Goal.
- Buying a Car or Bike , Planning a Vacation –> Short term goals
- Purchasing or building a house –> Medium term goals.
- Planning for Children education , Marriage –> Medium or Long term depends on Child’s age.
- Retirement Planning –> Long term Goals
Prepare your own goals with years to Achieve. Please download the attached excel to plan your financial goals.
For your Financial Planning , Please contact us and our team will guide you at a nominal fee.
4.Get to know about the Personal finance.
There are tons of articles are available on the internet. There is no limit to gain knowledge. You can always start with Tax Saving Investment options.
Below are the Tax saving investment options, Get to know about it in details.
- ELSS – Equity Linked Savings Scheme
- Tax Saving Fixed Deposit – Post office
- Sukanya Samriddhi Yojana – A Complete Guide
- National Savings Certificate
- NPS : National Pension Scheme
Other Investment options,
- Debt Mutual Funds in India
- Recurring deposits
- Senior Citizens Savings Scheme
- Post office Monthly Income Scheme
- Kisan Vikas Patra – Double your money scheme
- Stock Market
5.Change the Formula of Savings.
✘ Income – Expenses = Savings –> Most people follow this formula. If you want to achieve your financial goal, Change this formula to below:
✔ Income – Savings = Expenses
The Main Idea to follow “Income – Savings/Investments = Expenses” is to develop the Saving nature before we start to spend.
6.Know your Debts
- Calculate your Loans and Check out EMIs. Devise a plan to get rid of the Debt Trap.
- Simple way to get rid of EMI quicky is doing the PART Payment after the Floating period. This way it reduces the EMI Burden. As and When you receive bonus or someway around lumpsum income, Pay as Part-payment.
Know your EMI from our EMI Calculator here.
“No Debt = More Savings”
7.Review your Portfolio :
- Some of you have already started the above things and For you, Review your Portfolio.
- Assess the Stocks, Mutual funds NAVs.
- How much Percentage is down and how much is required to get breakeven.
- Get Inspired by Quotes in this downfall period.
Simple way to keep track of your Stock Portfolio by using our template
- Many of us have GOLD in our Locker , But we don’t know the exact weighs we own.
- Evaluate your GOLD worth.
What other things you shall do to improve your Financial Knowledge?
1.Income Tax calculation :
Estimate your own tax for the next financial year. Prepare an Excel sheet and Calculate.
Study our Indian Taxanomy.
Check out : How Indian Income tax slabs have changed since Independence 1947 to Now– History of Various Tax Rates
How did you diversified your Assets. By it’s current value, Calculate the Percentage wise allotted.
3.Net Worth Evaluation
Write down your past Investment with its Current Value. Know your worth in Value. Seeing in Numbers helps you to focus more on your Financial Freedom Journey.
You shall use Financial Calculator to know about the future returns also.
4.Read Books on Personal Finance
I have complied a list of books. Check out here. My Bookshelf.
Rome wasn’t built in a day, Hence Start Planning Today !
Use the Lock-down time for yourself.
Again, Stay Inside & Stay Safe ! Cheers !!
Happy Investing !!
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Let others also know if you have some ideas to use !
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This Post Has 2 Comments
Nice article, well you can include the apps that people can use to track their spendings which will also help in short to long term planning and tracking.
Well thanks ! Will compile the list of apps to track the spendings. Soon will post an article on that.. Thanks for your suggestions.