Congratulations! You have heeded a very important financial advice, and created for yourself an emergency fund. Having a buffer of three to six months of expenses in liquid assets is a significant measure. It is in fact an integral part of financial planning.
But what comes next?
You need to have a plan for the amount that you were putting away for the fund till now. Appraisal or bonus money should be allocated wisely. Without proper planning, it is easy to turn into a lifestyle creep. Now that you have created a nest egg, here is what to plan for next –
Create Wealth
The best way to create wealth, especially for salaried individuals is to start investing. Instead of depositing all your savings in banks, work towards investing some of that amount. To start investing, you can opt for a Systematic Investment Plan (SIP). You can always get a financial assessment done to decide the best plans for yourself. Take the help of a financial advisor, and don’t be afraid to ask questions!
Plan for retirement
If you haven’t made retirement planning a priority yet, do it now. It is never too early to start saving for retirement. You can opt from products such as National Pension Scheme (NPS), Employee Provident Fund (EPS) among others.
Improve credit score
A good credit score makes it easier to avail loans from financial institutions. Make sure to pay off any consumer debt, such as credit card loans if you receive a windfall. It is important to never miss out on an EMI (Equated Monthly Installment)
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