Living a financially secure life. Is it possible?

Dreaming of a life with no financial worries? Is it possible? The answer is a loud, resounding Yes! With a healthy financial plan and a little bit of financial discipline, living a financially secure life is possible. But financial security isn’t a 2-minute noodle. Like all good things in life, it yields great results only when sustained over the long term.

Here are 5 things you can do to live a fulfilling and financially secure life-

1. Save for emergency or unplanned expenses: Unplanned expenses can surface when least expected. Set aside at least funds equal to 6 months' expenses. (Last minute plan of a road trip or splurging on an expensive gadget is not an emergency)

2. Buy a suitable health insurance: Medical emergencies come without prior notice and can take a heavy toll on finances. How about buying health insurance for you and your family (spouse, children under 18, and dependent parents) as a gift on birthdays and anniversaries to show you care? It works as great financial support when you need it the most. Plus, the premium paid on the health insurance policy is exempt from tax (up to a certain limit), so that’s a double bonanza. Likewise, you can enjoy tax deductions on life insurance premiums while protecting the financial interests of your loved ones in your absence. So, life and health insurance should be a top priority for one and all.

3. Tie investments with life goals: Align investments with life goals. For example, invest in tax saving funds for long-term goals like retirement planning or a down payment for a new home.

4. Top-up investments when feasible: Direct a part of the bonus and annual increment (the more the better) into your investments so you can reach your financial goals earlier than expected.

5. Separate needs and wants: Maintain financial discipline by differentiating between needs and wants, and allocating a fixed amount towards investment. Use SIP as a tool for big purchases and maintain financial discipline.

You’re probably thinking that achieving financial security effectively means bidding goodbye to any kind of guilt-free enjoyment. That’s not true. As long as you maintain a healthy ratio of investments to expenses, maybe around the ballpark of 65:35 depending on your income and lifestyle, you should be good to go.
The sooner you start investing, the faster you will be on the path to achieving financial security. If you haven’t started planning your finances yet, this is a good time to begin!

Views and opinions contained herein are for information purposes only and should not be construed as investment advice/ recommendation to any party or solicitation to buy, sale or hold any security or to adopt any investment strategy. It does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The recipient should exercise due caution and/ or seek professional advice before making any decision or entering into any financial obligation based on information, statement or opinion which is expressed herein.

Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Limited Investment Manager: Axis Asset Management Company Limited (the AMC) Risk Factor: The Sponsor is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.