Given below are few rules that can help you and your loved ones make wise and easy financial decisions for a stress free life.


Always have a tentative idea about your finances like the amount you are earning, any extra income you may have, your monthly expenses, your regular expenses, entertainment and travel cost as well as miscellaneous expenses.


Experts recommend at least 10% of your earnings should contribute to your savings, of which minimum of 4% should be fixed income generating instruments like fixed deposits. Always invest your surplus cash and build a corpus.

Assets and Liabilities

Make note of all your assets and liabilities. Ideally net worth should be positive (assets-liabilities). Own assets that increase in value and are of low maintenance. Maintain an inventory of assets that you own. Create a list of beneficiaries and proportion of assets that you would want to distribute/allocate to each one of them in the future. Thumb rule says as you grow older, your asset allocation needs to move from equity funds towards debt funds and fixed income investments.


Always segregate expenses into Fixed/Variable, Urgent/Non Urgent, Necessity/Luxury, Need/Want. Apply rule of 50:30:20, where 50% is your household expenses, 30% is entertainment and leisure and 20% is saved as emergency corpus that is nearly 6 times the monthly income.

Mutual Funds

Mutual fund is safest option of investment, start at least with SIP of minimum Rs. 500 a month. Invest in tax saving options like ELSS.


Income to EMI ratio should never cross 35 to 40%. Never borrow on depreciating assets. Try following the 20/4/10 rule for vehicle loan to keep a tab on your finances, where 20 stands for your down payment amount, 4 is the number of years of loan and 10 is the ideal percentage of your net take home salary that should go towards car loan EMIs.


Allocate only 5% to 10% of your portfolio in stocks, and reallocate it periodically for better returns and reducing risk.

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