Before you begin your Investment Journey, it’s important to build a strong foundation of personal finance basics.

1. This includes having at least 6-12 months of expenses as an emergency fund in Savings accounts, FDs or liquid mutual funds.

This ensures you are capable of taking care of unexpected minor expenses (say unexpected car repair, kid’s school trip, minor medical expenses etc) so that you don’t have to dip into your investments or sell them at a loss when the markets are down.

2. The second basic thing you need to do is ensure you have sufficient term insurance.

This is to be looked at as replacement of income in case you were the primary breadwinner at home and the premature loss of your life should not prevent your dependent family members from continuing their current lifestyle including monthly expenses and meet their financial goals such as kids education.

3. The third thing you need to set up is sufficient Health Insurance.

Hospital expenses have skyrocketed in the last 20 years. One unexpected hospitalisation can make you bankrupt, push you into debt, or at the very least take a sizeable chunk out of your investment corpus.

To prevent this, you need to ring fence your wealth with a Health Insurance that can pay your hospital bills in lieu of a nominal yearly premium.

Assuming that your corporate-sponsored health insurance is sufficient could be risky. You need to think what you would do if you leave the company. Also most policies have a 2-year waiting period for pre-existing conditions.

All of this could be quite confusing!

To choose the best term and health insurance suitable for your specific needs, our recommendation is to use Ditto.

Fin and Me aspires to simplify Personal Finance and Ditto aims to make insurance easy! This value alignment makes us natural partners!

You can follow our referral link here:

Ditto experts will guide you for free, without any conflict of interest. The choice to buy after the advice is yours, but we recommend you do, because you can then seek help of Ditto experts during times of filing claims as well.