Happy New Year 20-20

As we beckon a new year, Droplet recommends 20 things that will help you turn a new page in your financial life.

1.  Have a monthly budget in place.

2.  Earn. Save. Spend. - Start early. Start immediately. 

3.  Buy a term insurance covering 20 times of your salary. Helps your dependents largely during your absence.

4.  Have adequate medical insurance in place. You don't have to shell out cash in case of medical emergencies.

5.  Do not mix insurance with investments.

6.  Have atleast six months of your monthly expenses as contingency fund.

7.  Have a plan in place before buying a property. Such as location, accessibility, resources, so on.

8.  Don't buy a property due to peer pressure or societal pressure or for status. Buy only when you are ready and it is absolutely necessary.

9.   Buy real estate only if you have 30% cash for down payment.

10. Buy real estate only if you are confident that you would stay there for next 20 years.

11. Plan and pay off your home loan in first 7 years.

12. Don't buy a second house thinking it as investment. It is not.

13. Invest according to your risk appetite.

14. Have an asset allocation.

15. Invest 80% of your money in equities and 20% in debt while you are young and vice versa as you near retirement.

16. Buy a car which is worth not more than six months of your(s) net income. Too much of luxury is a trap.

17. Stay healthy. There is no point in having wealth without good health.

18. Have goals and review them periodically. There is no point in having goal without a plan.

19. If you cannot figure out your investments or finding it difficult to chalk a financial plan, talk to an adviser. It will help you a lot.

20. The most important of all is - Spare sometime and read our blogs to improve your financial literacy.

Happy New Year!