There are already so many people proven and suggested the Financial Rules.
I am trying to collect them here.
Rule 1: 50-20-30
If you earning 100 rupees, one should spend as follows.
50- For necessities
20- Long term Saving
30 - Life Style Choices
Rule 2 : 30 days rule
If you want to buy anything big item like TV or fridge, post pone your decision for 30 days. If you still have a urge to buy it, go for it.
Rule 3 : CC bill should never go beyond 30% of limit.
If your credit bill is going beyond 30% of limit, you don't have control over your expenses or your needs crosses your income.
Rule 4: Dave Ramsey - Financial Rule
25% - EMI
15% - For retirement
10 years - Life Insurance
3 months - Emergency Funds
Rule 5: Car Loan Rule - 20/4/10
20 - percentage of down payment
4 - max tenure
10 - percentage of income
Rule 6: 28/36 - DTI ratio
Your housing EMI should not more than 28%
All your debts should not be more than 36%
Rule 7: Home loan eligibility
50-60 times of your salary
Rule 8: Income break up
35% - Housing
15% - Food
12% - Transportation
8% - Debts(CC)
7% - health care(insurance)
5% - Cell phone bills
5% - Other Savings
5% - Entertainment
3% - Clothing
Rule 9: Personal Loans
Should not go beyond 12 times of your monthly salary
Rule 10: Liquidity
At least 20% of your wealth should be liquid so you can utilize it when necessary.
Rule 11 : Perfect Portfolio
A typical allocation would be 50 per cent in large-cap funds, 20-30 per cent in small & mid-cap funds, and the rest in debt funds.
Rule 12: Contingency planning
All regular expenses of 3 to 6 Months
Rule 13: Health insurance
Family Floater Plan and Personal Accident Cover:
Rule 14: Life Insurance
As a thumb rule, your sum assured should be at least 10 times of your annual income: Outstanding Loans+ Dependents Expenses (Childs education, marriage) Inflation to be considered, Spouse Life expectancy
Rule 15: Retirement Planning
Current Age Minus Retirement Age , Household and lifestyle expenses on Today’s value
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