Like a child needs to be managed in different ways at different stages of Life….Your Money also needs special care in special situations. Sadly that does not happen….. But it should happen!!
These special situations could be:
1. Loss of Job: Here comes the role of Emergency or Contingency fund which in other terms is money saved for the Rainy Days. In case of sudden loss of job, life gets unpredictable. So, it is advisable to keep 6 month’s salary as emergency fund for meeting of household expenses till one finds a new job.
2. When you get Married: The wedding functions and honeymoon can be planned but what happens when you get back to Daily Grind of Life. Especially for Indian females, they should update their records and get the changes made wherever required. Talk about money…be open and talk about each ones liabilities and assets .If possible, split tasks. A little planning and transparency will allow newly weds to build a strong relationship. Here’s hoping that money never comes between the two.
3. Child Birth: It is one of the most beautiful events in a couple’s life. But be prepared for a sudden rise in expenses like Doctor’s Fees, Vaccinations, Baby’s essentials etc. Make sure that you don’t overspend on the things like clothes, footwear, expensive Toys; stylish cribs etc as the little one really don’t need them all. Buying so many clothes will not be wise as baby will outgrow them in just matter of weeks. Also, add him/her in Health cover and increase your Life insurance as well as now you have more responsibilities on your shoulders.
4. Promotion in Job/Surplus due to Inheritance: Don’t get carried away by fatter pay cheque or a sudden inflow of surplus cash which were never yours. Review your goals and direct the additional income to savings. This calls for immediate review of Financial plan as the surplus can be earmarked towards your Goals and Aspirations.
5. In case of Illness/Disability/Death: The loss of job is not the only event that will turn your life upside – down. In case of any critical illness diagnosed, which is for sure uncalled for, family will be left in lurch. Also, in case of sudden demise of the bread winner of the family and absence of proper planning, family members will keep on running from pillar to post to have access to the assets that one leaves behind. Make sure you have covered against these risks by not only buying required insurance policies but also making a will when you are young.
Learning how to manage your money the right way in Different situations is an important step towards taking control of your life.
Are you equipped to handle these special situations?
Gurleen Kaur is a Financial Consultant and devotes time to her company www.hareepatti.com . She has completed her Bachelors in Finance and Investment Analysis (BFIA) from College of Business Studies (CBS, Delhi) and MBA from IMT, Ghaziabad. Currently she is also pursuing her studies to become a Certified Financial Planner.
She can be contacted at gurleen@hareepatti.com
Some of the Images have been sourced from www,google.com
