Is Your Financial Life On Track?

While we all have different goals in life, there’s one that we all share—the goal to be financially sound. All our lives, whatever we do, we do it with an aim of earning better. It becomes quite frustrating if, after that entire struggle at work and burning the midnight oil, things don’t go the way we want them to. The ultimate reason for working that hard is not merely a raise or a promotion; we do it for something more—to be financially sound. This keeps us going.

Some of the basic parameters to judge anyone financially are—their income, their spending habits, their savings and investments. If you’ve got all or most of these right, your finances are more or less on the right track.

Even if you’re not facing any financial troubles at the present, that doesn’t ensure a safe future ahead. Here are some pointers to check whether you’re doing enough to keep your financial life on track:

What does your bank balance say?

Your bank balance at the end of every month acts as a great indicator to show you how well you’ve done. Did you exhaust it all by spending on a sale or on some expensive gadget that you don’t even use? According to most financial experts, you must save at least 20 per cent of your monthly salary. If you’re unable to do that, you’re doing something wrong.

Are your resources growing?

Your resources include everything you own—your bank balance, property, cars, gold. To evaluate your financial standing, you need to evaluate the net worth of all your resources and see if there’s a positive growth. It doesn’t mean that your net worth needs to grow exponentially, but there just needs to be a positive growth curve for it. Continuous growth in your resources is a great indicator of a good financial record.

How many loans do you need to repay?

You might be earning well, but if you have a lot of loans to pay off, you need to plan your money better. First of all, you must not borrow so much. In the worst case, even if you need to borrow, you must balance it well. If you’re in need of a house, it makes sense to opt for a Home Loan. But to take a Personal Loan just to fund a dream vacation simultaneously might not be a great option. If you’re heavily dependent on loan money, you have a lot to work on!

Do you have insurance?

‘Why do I need insurance to check my financial stability?’— that’s probably what you’re thinking right now. Consider this scenario—you just saw the house of your dreams and arranged for a huge down payment for a Home Loan. But suddenly there’s a medical emergency and you have no other option but to use that down payment money to take care of the emergency. 

As you rise up to the occasion and look into the emergency as a priority, your dream to occupy that house gets postponed. Heart breaking, isn’t it? Well, you could’ve easily avoided this situation if you had taken a Health Insurance cover, right? You could’ve used the insurance money for the emergency, while your down-payment money would’ve remained untouched. Now you know why staying protected from potential external damages are essential for your financial security, don’t you?

[Source: https://blog.bankbazaar.com/is-your-financial-life-on-track/]