Most people think that working a full-time job and earning a regular pay cheque will provide them with enough financial security. Do you believe in the same? If yes, then it is high time that we burst your bubble.
As a matter of fact, your pay cheque provides you with temporary financial security. It lasts as long as your job lasts. Moreover, your spending habits have an impact on your financial wellness. For this reason, you need to have an investment plan that is specially curated to fulfill your needs in the future.
ULIP plans are one of the best investment choices that you can make. ULIP stands for Unit Linked Insurance Plan – a combination of insurance as well as investment. In a ULIP policy, the investor makes small premiums that partly goes to secure life insurance and the remaining amount is invested (either in equity, debt or something both).
Well, apart from making wise investment decisions, you also need to change your spending behavior. Here are five behaviors that are most likely to threaten your financial security.
1: You spend every penny that comes to you
Do you keep spending money on unnecessary things on a regular basis? If yes, then it needs to stop. While comfort is important to everyone, you must still make efforts to save some amount every month towards your future.
Avoid spending on things such as shopping, entertainment and dining out (unless it is the need of the hour). In fact, keep reviewing your monthly budget and look for ways to cut costs. This helps you in saving a lot of money right away.
2: Making assumptions about your future
You cannot assure that your pay cheque will remain high as you age and gain more experience. For instance, your salary might increase in the near future, but your employer might not be keen on raising it further in the future.
Hence, it is up to you to follow healthy financial habits from the very beginning of your career. This way, you will have enough savings when you are about to retire. Delay in this will only keep you from achieving your financial goals.
3: Not saving enough
To maintain your standard of living, after you attain retirement, you are required to have enough savings. For that, you need to understand the gap between how much you have saved and what you think you might need to maintain your standard of living.
One good rule to follow is to save the equivalent of your annual income by age 30 and to save 10 times your income in case you are planning to retire by age 60.
4: You keep taking on more debt
If you are taking more debt or spending more than 20% of your income in paying off debts, then you are at risk of not having enough financial security in the future. However, at times, debts can be beneficial if they accommodate a goal such as earning a degree or buying a new house.
In the end, just remember that taking more debts only means less money for saving or investing in your future.
5: You take the impulsive road with investments
Most people make an investment without considering the risk or other crucial factors. Hence, make sure that you are not investing your money towards something you don’t fully understand. Chasing quick returns can never be good – so beware! Before you make any investments – take a step back, conduct informed research and also discuss it with your financial advisor.
You have to understand the fact that achieving financial security is not always about making the right decision. Any unfortunate event in life can affect your financial wellness. However, having an insurance or investment plan makes this journey a bit smoother.
In that case, how about purchasing a policy that gives the best of both worlds?
ULIP plans have twin benefits – a part of your premium goes towards life protection while the remaining amount is invested to gain returns. You have the flexibility of switching between investment funds to match your ever-changing needs.
Different providers have different ULIPs. Choose the one that is right for you and that helps you meet your financial goals.