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Quick tips on financial planning
January 29, 2009
Based on the liquidity corpus built, about six months down the line, they could also consider reducing/closing the car loan as it did not provide any tax breaks (unlike a home loan liability) and was a mere burden on the household.
The savings of such EMI could again be utilised for prudent investments keeping in mind their key financial needs.
Points to be considered for financial planning in challenging times:
Plan towards your long term and short term goals
Use avenues that are flexible and that could be stopped even if temporarily
Plan for liquidity of three to six months of expenses
Evaluate risk and returns and create a diversified portfolio
Focus on avenues providing tax free returns
Try and set aside 25 per cent of income towards investments
Keep a tab of your expenses, especially, how much you spend via credit cards
Don't miss out on tax optimisation with/without investing in:
Joint home loans
LTA claim for alternative years
Use company re-imbursements to maximum extent
Take medical insurance as family floater plans and for self/parents
Also read: Right time to buy property?
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