Having a car in today’s age has become a necessity rather than a luxury given the fast paced life and the need to commute easily. Though cab rental services are available, having your own car is better and more convenient. Moreover, the small car market is booming giving you affordable cars which are not too hard on your pockets. However, many still wonder, is buying a car better or renting it?
Let’s analyse the pros and cons of both buying vs renting a car –
Pros and Cons of buying a car
Travel at your own convenience
Considerable funds needed to buy a car
Ease of multi-destination trips
Insurance premium expense
Servicing costs and pollution checks
Pros and Cons of renting a car
Utility of time
Might not be available instantly
No need to drive in traffic
Not cost-effective for regular commute
Car rentals are easily available for self-driving
Rentals can be expensive
Though both buying and renting have their respective pros and cons, owning a car is always better and if you can afford it you should buy it.
Financing a car
Now that we know that buying a car is better, the question arises – How do you finance it? The answer is easy – through a car loan. If you don’t have sufficient savings at your disposal, you can always opt for a car loan. The loan is available for up to 5 years at an affordable rate of interest and allows you to finance your car easily.
What is a car loan?
A car loan is a loan which is offered by banks and non-banking financial companies to buy a car. The loan is offered for up to 90% of the car’s value and the remaining should be paid by you as down payment. The loan is secured against the car that you buy and has a low interest rate. You can repay the loan over a period of 5 years in affordable monthly installments. Prepayment facility is available under the loan wherein you can prepay the loan partly or fully if you get surplus funds.
When you buy a car, you need to buy a car insurance policy with it as well. The Motor Vehicles Act, 1988 mandate every car in India to carry a valid third party liability insurance cover on it. This cover is needed against any third party liability which you might incur if there is an accident and an individual is hurt or his/her property is damaged by the car.
Though a third party liability policy is mandatory, it does not cover the damages which your car suffers in any accident or if the car is stolen. In such cases too you suffer a financial loss. This financial loss can be covered by a comprehensive car insurance policy. A comprehensive policy is one which covers both third party liabilities and the damages suffered by the car thereby giving you an all-round coverage.
Which car insurance policy is better?
When comparing between third party and comprehensive plans, the latter wins hands down. A comprehensive policy is always better than a third party coverage because –
It offers a comprehensive scope of coverage
Theft of the car is also covered by the plan
There are various add-ons which enhance the coverage further
Add-ons available under comprehensive car insurance plans
As stated earlier, comprehensive car insurance policies offer a range of add-ons. Let’s have a look at some of the most popular add-ons which are available –
Name of the add-on
Return to invoice
Pays the invoice value of the car in case of total loss or theft
24*7 assistance if the car breaks down in the middle of the road
No deduction for depreciation in the case of claim
Coverage against engine damage due to water-logging
Personal accident for passengers
Personal accident cover for the passengers travelling in the car
Premium discount if you choose to pay a part of the claim yourself
No claim bonus protection
Protection of the no claim bonus even if a claim is made
Cover for the accessories of the car in case of damage
So, if you want to commute hassle-free, invest in your own car. A car loan helps fund a car and is also affordable. When buying a car do opt for a comprehensive car insurance policy for a wide coverage against possible damages and stay financially protected. For a more comprehensive guide on buying and insuring your car, take this course on financial planning and get a better understanding.
Having a good education is the foundation stone for a bright career. Your education determines your success and that is why a good education is always stressed upon by parents. When it comes to education, international education is a dream which every parent has for their children. They want their kids to receive education from a reputed international institute to give them an edge in their career.
Education, whether domestic or international, proves to be quite expensive. Education inflation is steadily rising and pursuing higher education in any reputed institutes requires a considerable amount of money. While parents save money to educate their child, sometimes, the savings might not prove sufficient, especially given the increasing cost of education. In such cases, an education loan comes to the rescue.
An education loan is a loan which is allowed by banks and non-banking financial companies to fund higher education. You can avail a loan for yourself, your children and even for your dependent siblings for financing their education. Some of the features of education loan are as follows –
The loan funds the cost of tuition, admission, boarding expenses and other costs related to the course being financed
The loan is a good loan as it offers tax benefit on the interest paid for the loan under Section 80E of the Income Tax Act, 1961
The repayment usually starts a year after the completion of the course of getting a job, whichever is earlier
The repayment tenure allowed is between 7 to 10 years
How to apply for an education loan?
You can apply for an education loan either by visiting the branch of a bank or NBFC offering the loan or online. Online application can be done either through the website of the bank or NBFC or through the website of loan aggregators. Aggregators are better as they allow you to compare the loan offers of different lenders and then choose one which has the lowest interest rate. A collateral security might be needed to avail the loan when the loan quantum is high. You must also fulfil the eligibility criteria of the lender to avail the loan.
Benefits of education loan
An education loan is beneficial in the following respects –
Ease of financing quality education
Funding international education
Protect your financial savings from being drained
Affordable interest rates
Funding of all types of expenses incurred in higher education
Tax benefit on interest paid
Easy repayment which allows the student time to get a job before loan repayment starts
Affording an education loan
An education loan has a long repayment cycle and also a low interest rate. These factors make it easy for parents to afford an education loan. Moreover, the tax benefit allowed at the time of repayment of the loan also helps you increase your disposable income therefore making the loan affordable.
Repayment of an education loan
Repayment of the education loan is done through EMIs. The EMIs depend on the rate of interest, principal amount of loan and the repayment tenure selected. The repayment starts a year after completion of the course and getting a job. This allows students to easily pay off the loan. As a parent, you should make your child repay the loan from his/her income. This makes your child financially responsible and also reduces your debt burden.
Estimating the amount of education loan
When planning for your child’s future, you need to estimate the cost of education which would incur when your child pursues higher education. Moreover, if you are availing an education loan, you need to assess the amount of loan needed to sufficiently cover your child’s education expenses.
When estimating the cost of the child’s higher education, inflation should be considered. Inflation would increase the cost of education in future and so you need to find out the actual funds needed. For instance, if a course today costs Rs.10 lakhs, in 10 years’ time, it might double to Rs.20 lakhs.
You, therefore, need to plan to accumulate Rs.20 lakhs by the time your child needs funds for education. Thereafter, when the time comes, you can finance the education of your child through your savings and also through an education loan if your savings fall insufficient.
Education is a very important thing for your child and being a parent, you would want the best for your children. To afford the best education, you can save and also avail an education loan to ensure that your child does not have to compromise on the education which he/she should receive. For complete details on education loan, take this course on financial planning and understand what the loan is all about and how it works.
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Who doesn’t like maximizing their wealth with market linked returns and a professionally managed portfolio?Market-linked investments hold attraction for many investors and that is why mutual fund investments are very popular.These investments give good returns, diversify the risks through asset allocation and also have tax benefits. But before jumping on the mutual fund bandwagon, you need to understand what these investment avenues are all about and how they work. So, let’s explore –
Mutual funds are investment schemes wherein money from different investors is pooled together in a fund. Thereafter, a fund manager uses the pooled money and allocates it to different types of stocks and securities. With investments in different types of assets, a portfolio is created and you are allotted units for your share of investment in the portfolio.
How do mutual funds work?
To understand the working of mutual funds, the following flowchart can be considered –
Management of mutual fund portfolio
A mutual fund scheme is expertly managed by experienced fund managers. These fund managers are hired by the mutual fund companies and one or more managers can be tasked to manage a fund. The fund managers, then, decide on –
Where to invest
When to invest
How much to invest
Fund managers make decisions in the interest of the investors so that investors can earn maximum returns on their investments.
Mutual funds invest in securities in the financial market. Returns are, therefore, market linked. If the value of the underlying assets increases, the fund grows and vice-versa. Mutual funds, therefore, are risky.
The risk profile of mutual funds depends on the fund that you choose. Equity mutual funds have a very high risk profile while debt funds have a very low risk.
Types of mutual fund schemes
Mutual funds come in different variants to suit the investment preference of different investors. There are, mainly, three types of mutual fund schemes which are –
Equity mutual funds which invest at least 65% of their portfolio in equity
Debt mutual funds which invest a majority of their portfolio in debt
Balanced mutual funds which invest in both equity and debt
Here are the characteristics of these funds –
Type of mutual fund
Equity mutual fund
· High risk high return profile
· Minimum 65% portfolio is invested in equity stocks and securities
· Investment objective is long term capital appreciation
· Further sub-divided into large cap funds, small cap funds, ELSS schemes, mid cap funds, etc.
Debt mutual funds
· Invest in fixed income instruments
· Have a low risk low return profile
· Since investment and redemption of debt instruments are done at different intervals, there is no fixed return
· Further sub-divided into liquid funds, short term debt funds, long term debt funds, dynamic bond funds, fixed maturity plans, etc.
· Have a moderate risk moderate return profile
· Invest in both equity and debt
· Funds which invest primarily in equity are called aggressive hybrid funds
ELSS mutual funds
ELSS mutual funds are one of the most popular mutual fund schemes given their tax advantage. ELSS stands for Equity Linked Saving Scheme and it is an equity mutual fund. Investments into ELSS funds qualify for deduction under Section 80C of the Income Tax Act, 1961 up to Rs.1.5 lakhs. There is a lock-in period of 3 years during which redemption and switching is not allowed.
Systematic Investment Plans (SIP)
SIP stands for Systematic Investment Plans. SIPs are not a type of mutual fund but a mode of investing in a mutual fund scheme. If you choose SIPs, you can invest regularly into a mutual fund scheme rather than in one lump sum. You can choose the amount to be invested, the frequency of investment and the investment tenure over which the SIP would continue.
SIP investments are affordable, disciplined and give you the benefit of rupee-cost averaging wherein you don’t have to time the market every time you invest.
Here is a FREE SIP Calculator tool which will help you to calculate an estimated earnings at the end of a specified tenure.
To choose a SIP, you must, first understand the type of mutual fund scheme that you want and then invest in it through SIPs. When choosing the type of mutual fund scheme, you should consider –
Your risk appetite
Past investment experience
Your disposable income
Number of dependents, etc.
Once you know which type of mutual fund scheme would be suitable, you can invest through SIPs. You should, however, compare similar mutual fund schemes of different houses on their returns and consistency and then invest. Make sure you compare similar mutual funds with each other so that you can get the best results.
Mutual funds are taxed based on the composition of their portfolio and the period for which you stay invested in the fund. If the fund invests at least 65% of its portfolio in equity, there would be equity taxation on the returns earned. If, however, the fund does not have at least 65% of its portfolio in equity, there would be debt taxation. Here’s how equity and debt taxation are applied –
If the fund is redeemed within 12 months of investment, the returns earned would be termed short term capital gains. Such gains would be taxed @15% + cess
If the fund is redeemed after 12 months of investment, the returns earned would be termed long term capital gains. Long term capital gains are tax-free up to Rs.1 lakh. Returns exceeding Rs.1 lakh are taxed @10%
Investment in equity mutual funds, except ELSS schemes, form a part of your taxable income
If the fund is redeemed within 36 months of investment, the returns earned would be termed short term capital gains. Such gains would be taxed at your income tax slab rate
If the fund is redeemed after 36 months of investment, the returns earned would be termed long term capital gains. Long term capital gains are taxed @20% with the benefit of indexation
Investment in debt mutual funds form a part of your taxable income
Balanced funds would be taxed as equity or debt depending on their asset allocation.
Why choose mutual funds?
Now that you know what mutual funds are and their various aspects, you should also know the benefits of investing in mutual fund schemes. Mutual fund schemes are ideal for investment because of the following reasons –
Professional management helps you invest in the right securities
Diversified portfolio helps in minimizing risk and maximizing returns
They are easily available
Different types of mutual fund schemes to suit your investment objective
They are liquid and tax efficient
You can invest in a disciplined manner through SIPs
Mutual fund investments are, therefore, popular and suitable for all types of investors. Before you begin your mutual fund journey you should take this FREE course on Mutual Funds and understand mutual funds in depth so that you can choose your preferred scheme and maximize your wealth.
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Financial responsibilities and obligations keep cropping up from time to time. Some are planned while others are unplanned. For most of your financial responsibilities you plan and save in advance and yet sometimes your savings might not prove sufficient. Moreover, if an uncertain expense comes up, you might need additional funding to meet the financial obligation that you face. This is where loans come into the picture.
Loans are a source of funds which you can avail from financial institutions like banks and non-banking financial companies. The loan allows you a lump sum fund at a specific rate of interest which is fixed by the lender. Thereafter, you can choose the repayment tenure over which you can repay the loan in small and affordable instalments.
Types of loans
Banks and financial institutions offer a range of loans which can be availed for different financial needs. Loans can be broadly divided into two categories –
Secured loans are secured against an asset while unsecured loans are not. Unsecured loans are offered based on your financial status and secured loans are offered based on the value of the asset against which they are secured.
Some of the commonly available secured and unsecured loans include the following –
Type of loan
Unsecured multipurpose loan for financing various personal or commercial financial needs
Secured loan to buy a vehicle
Secured loan to fund higher education
Secured loan to finance the purchase of consumer durables
Secured loan to purchase a home or a plot of land
Secured or unsecured loan to meet the financial needs of a business
Moreover, loans can be categorized as good loans or bad loans. Bad loans are those which have a high interest rate and severely impact your credit score in case of defaults. Good loans, on the other hand, are those which build up a good credit score and also offer tax benefits.
Important aspects of a loan
Here are some of the main components of a loan which you should know about –
Loan amount or principal
This is the amount of loan which you borrow from a lender.
EMI means Equated Monthly Instalment. This is the amount of money which is payable every month to repay the loan. The EMI consists of a part of the principal amount of the loan and the interest payable thereon. With each EMI paid the loan amount reduces.
The loan that you avail should be paid back within a specified duration. This duration, over which the loan is repaid, is called the repayment cycle of the loan. The lender specifies the minimum and the maximum repayment tenure that is available for the loan. You, as a borrower, then, can choose the repayment cycle as per your affordability.
Rate of interest
Rate of interest is the interest charged by the lender on the loan amount that you have availed. The interest is calculated on the outstanding balance of loan and the amount reduces after each EMI payment.
The EMI of the loan is calculated taking into consideration the principal, the rate of interest and the repayment cycle of the loan. Here’s how these factors impact the EMI –
Principal – Higher the principal of the loan, higher would be the EMI
Rate of interest – Higher the rate of interest, higher would be the EMI
Repayment cycle – Longer the duration of the repayment cycle, lower would be the EMI
You can choose the principal and the repayment cycle but the rate of interest is determined by the lender. You can calculate the EMI before availing the loan to ensure that the EMIs are affordable and can be repaid easily.
Credit cards are quite popular among individuals for financial transactions. But did you know that credit cards are a type of personal loan?
Credit cards allow you to buy first and then pay later. There is a billing cycle and the entire transactions done within the cycle are payable within a due date. If you pay the entire outstanding amount within the due date, no interest is charged. However, if you don’t pay the amount or pay partially, interest is charged on the outstanding balance as well as on credit transactions done in the next billing cycle too.
Credit cards have high interest rates and can prove to be a bad loan if you don’t pay your bills on time. However, on the positive side, credit cards allow reward points and other benefits on your transactions. So, if you use a credit card wisely, it can prove to be a good tool.
Management of credit card debts
To ensure that credit cards give you the best benefits, you need to manage their usage. Let’s understand how –
The concept of MAD and revolving credit
Credit cards allow you a revolving credit facility wherein you can carry forward your outstanding credit card balance to the next subsequent months. For this revolving credit benefit, there is a limit of Minimum Amount Due (MAD). MAD signifies the minimum credit card due which you should pay in the current billing cycle to avail the revolving credit facility. Once the MAD is paid, the remaining credit card bill can be revolved to the next month.
Paying off MAD, though convenient, is not recommended. It is because the amount that you carry forward to the next cycle attracts interest. Since credit card interest rates are high, you tend to accumulate considerable interest expenses on the revolved credit. Moreover, if the credit is revolved, you also attract interest on the amount spent on the card in the next billing cycle from the first date of the cycle. This is also disadvantageous. Thus, you should not revolve your credit and pay the entire amount of your credit card debt within the due date.
To pay off your credit card debt, here are some tips which you can use –
Using your income and/or your savings
Converting the debt into affordable EMIs
Availing a personal loan
Using your investments
Personal loans – the most popular loans
Personal loans are quite popular among individuals as they are unsecured, easily available and allow funds for different uses. However, these loans have a high interest rate and affect the credit score adversely. So, here are the best practices and mistakes of availing a personal loan –
The credit score is a measure of your creditworthiness. It tells the lender how likely you are to repay a loan that you avail. The score ranges from 300 to 900 and the higher the score you have, the better would be the chances of getting a loan easily.
Your credit score is calculated by authorized credit bureaus like Equifax, CIBIL, etc. It is calculated taking into consideration the following factors –
Repayment history – if you have no repayment defaults, the score would be high
Credit mix – if you have a good mix of secured and unsecured loans, your score would be high
Credit utilisation – the lower the credit that you have availed, the higher would be your score
Credit history – if you have a good history of credit, your score would be high
How does loan impact your credit score?
The availability of loans solely depends on your credit score. The score tells the lender of your repayment risk and thus they consider the score before sanctioning the loan. Loans are usually allowed if you have a credit score of 600 or 650. For lower scores, loans are rejected. A score of 750-900 is the best score to get a loan easily.
Understand the loans available, how they work and how you can manage them to your advantage. Loans can prove to be a good source of funding your needs and if you manage them well you can avail and repay the loan easily. For a complete guide on management of debt, you can go through this financial planning course and get the complete knowledge on how to manage your liabilities to the best of your advantage.
Uncertainties spell trouble especially when they involve a financial loss. Sudden death, medical contingencies and damages to your assets are some common uncertainties which might incur and cause a financial hardship. To cover these uncertainties and to compensate for the financial loss suffered, insurance is available.
Insurance is a tool which compensates the financial loss suffered. It is a tool of risk management wherein you transfer your risks to the insurance company and if such risks occur, the company compensates you for the loss suffered.
How does insurance work?
Insurance works on the principles of pooling of risks and the probability of a loss. Individuals who face similar risks pool their risks together by buying insurance. They pay premiums for the policy which is pooled together. Thereafter, those policyholders who actually suffer a loss are compensated from the premium pool. Since the probability of loss is applicable for a few individuals, they can get compensated by the collective pool.
Why is insurance needed?
Insurance is needed simply for one reason – financial security. You cannot predict whether you would suffer a loss or not. However, you can prepare against the loss if it does occur. When you have insurance you have the financial security that if you suffer an uncertainty, you would not suffer any financial loss. Besides financial security, life and health insurance plans also give you tax benefits making them beneficial products.
Important aspects of insurance
Before buying a suitable insurance policy, you should know some of the important aspects of insurance which is common to all plans. These aspects are as follows –
Types of insurance plans
Insurance policies are broadly categorized into two different types – life insurance and general insurance.
Life insurance plans are those which cover the risk of premature death or living too long. Individuals buy a life insurance policy for a specific tenure and if they die during the tenure, the policy pays a death benefit. Moreover, there are plans which also pay a benefit if the individual survives till the end of the policy tenure.
General insurance plans, on the other hand, cover a variety of risks except the life of an individual.
Life and general insurance plans are further sub-divided into different types of policies. While life insurance plans have different policies for different financial needs, general insurance plans have different plans for covering different types of risks.
Have a look –
Types of life insurance plans in India
As you can see from the above chart, life insurance policies come in different variants. Here is a quick look at these variants –
Type of life insurance plan
Term insurance plan
Covers the risk of premature death and provides financial security
Whole life plans
Run up to 99 or 100 years of age and cover the risk of death during the tenure
Savings oriented life insurance plans which pay either a guaranteed death benefit or maturity benefit
Money back plans
A variant of endowment insurance plans but where the sum assured is paid in installments during the policy tenure in the form of money backs
Insurance plans specifically designed to create a corpus for the child’s future even when the parent is not around
Market linked insurance plans which provide the benefit of insurance as well as investment returns
Retirement oriented life insurance plans which help you create a retirement corpus and also receive lifelong pensions
How to choose the best life insurance policy?
Since there are different types of life insurance plans, you should be careful in selecting the most suitable policy which fulfils your financial needs. Here are, therefore, some points which you should keep in mind when buying life insurance so that you can get the best policy –
The sum assured of the plan should be optimal enough to cover the family’s financial needs
The policy should match your financial goal
A long term policy should be taken for longer coverage
While there are different types of general insurance policies, a health insurance plan is an absolute must. The policy covers the medical costs incurred in a medical emergency and thus provides financial relief.
Types of health insurance plans
Like life insurance plans, health insurance plans also come in different variants to fulfil the coverage needs of different individuals. These variants are as follows –
Type of health insurance plan
Comprehensive health insurance plans
These plans cover a range of medical costs and provide financial assistance in a medical emergency
Senior citizen health insurance plans
These are health plans designed for individuals aged 60 years and above
Disease specific health plans
These are health plans which cover specific diseases or the patients suffering from such diseases
Top-up and super top-up plans
Supplemental health insurance plans which can be used to enhance an existing coverage at affordable premiums
Critical illness health plans
These health plans cover a list of critical illnesses and pay the sum insured in lump sum if you suffer from any covered illness
Hospital cash plans
These plans cover hospitalization for at least 24 hours. In such cases, a fixed daily benefit is paid
Insurance and tax benefits
As mentioned earlier, life and health insurance plans offer you tax benefits. Let’s have a look at these benefits –
Income tax Sections
Premium paid to buy a life insurance policy is allowed as a deduction up to Rs.1.5 lakhs
Premium paid to buy a pension plan is allowed as a deduction up to Rs.1.5 lakhs which includes deductions under Section 80C
Premium paid to buy a health insurance policy is allowed as a deduction up to Rs.1 lakh
Section 10 (10D)
Maturity benefit received from a life insurance policy is tax-free in your hands
Section 10 (10A)
Commutation of pension from a pension plan is allowed as a tax-free benefit in your hands
Insurance is an important protection tool which you should have in your portfolio for financial security. Choose the suitable insurance plans depending on the risks you face and create your very own protection portfolio. For a detailed insight into insurance and its plans, you can take this course and get complete knowledge about insurance and its different aspects of financial planning.
As the breadwinner of your family, you need to provide for the varied financial needs of your family besides the needs of yourself. You, therefore, need to plan your finances in such a manner that the different family related goals can be met. Do you know how?
Let’s have a look at the different financial needs which you and your family can have and how you can plan for such needs effectively –
As you become financially independent, you need to address your financial needs and plan for your goals. These goals include –
Let’s understand how you can plan for each of these goals that you have –
Planning for wedding
Weddings are once-in-a-lifetime affair and involve considerable expenses. As such, you need to plan for them. Ideally, you should plan for your wedding related expenses in advance. You can set aside funds regularly to create a considerable corpus to meet the expenses of your wedding. Alternatively, if you are planning to get married in the near future, you can avail a personal loan. Personal loans are unsecured loans which give you funds for immediate financial needs.
Planning for wedding related expenses should also include planning for a honeymoon. As with weddings, honeymoons are also a once-in-a-lifetime affair and can prove expensive if you plan a perfect itinerary. You can, therefore, save in advance or opt for a personal loan to fund your honeymoon expenses
Though it seems far off, you need to plan for your retirement from an early age. When you do so, you can save small amounts over a long term period and build up a considerable corpus. This corpus would, then, help you fund your retirement expenses. You should choose suitable investment avenues for investing your retirement fund based on your risk appetite. Also keep in mind inflation and its effect on living expenses so that your corpus can be inflation proofed
2) Planning for Family
Once you have taken care of your needs, you should focus on the financial needs of your family, i.e. wife and kids. Here’s how you can plan for your family’s needs –
Planning for a DINK family
A DINK family means Double Income No Kids. This family is where both the husband and wife works and they have no responsibility of kids. These families have a high disposable income with no immediate responsibilities. If you have a DINK family and you are planning on having a child, you should, first create a corpus for your child’s future. Thereafter, you can plan for –
Buying a home
Buying a luxury car
Going on international trips, etc.
A higher part of the disposable income should be directed towards savings so that when responsibilities increase, you have sufficient savings at your disposal. Retirement planning should also be started so that you can create a substantial corpus for retirement.
Planning for a family vacation
Vacations are a way to unwind and a family vacation helps you spend time with loved ones. So, if you take vacations regularly, you should plan for them. You can save and create a travel corpus for your holidays by investing in low-risk funds since vacations are a short-term goal. Moreover, if you earn a bonus or a profit, you can use it to supplement your travel fund. If, however, you are short on funds, you can avail a travel loan. It is a type of personal loan which gives you funds for travelling so that you can take a vacation with your family.
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3) Planning for Parents
Financial planning for your parents should be done separately because they have distinct financial needs which need to be met. You need to make your parents financially self-sufficient so that they can manage their finances even when you are not around. So, here’s how you can plan for your parents’ financial well-being –
First and foremost, you should highlight the importance of saving money. Your parents should be made aware of the fact that they need to save money for their retirement so that they can live comfortably. Help them save and choose the right investment avenues for their retirement needs.
Parents often want to leave behind a legacy for their children. You should, therefore, help your parents do the same. Help your parents invest their savings and then create a Will allocating their property in the way that they want.
If your parents are financially dependent on you, buy a term plan for replacing your income in case of your unfortunate demise. Thereafter, insure your parents under a senior citizen health plan for their medical needs.
Pensions give you parents regular incomes in their old age so that they can be financially independent. So, help your parents plan their pension. Help them invest in a life insurance pension plan which would give them lifelong incomes
While you plan and take care of your and your family’s financial needs, you need to educate your family about the various assets and liabilities you have and how the same can be accessed. Store all your financial documents in one safe place and educate your family members about them. This would help them access the documents when needed when you are not around.
Your family is your most prized possession and their financial planning should also be sound and fool-proof. So, follow the above-mentioned financial planning tips for your family. For detailed information on any of these tips, you cantake this FREE financial planning course and get solutions to all your questions.