Sure, marriages are made in heaven, but today, a lot is going for singles as well. Firstly, as a single person, you are not answerable to anyone and second there is no one to mess your plans. Being single is a double edge sword though, and with no financial accountability, going overboard isn’t too challenging. You could be happily unmarried by choice, circumstance or chance. Irrespective of the reasons, the following are 5 things every single person must do to be actually financially independent:
- Create an emergency fund:Emergency by its very nature constitutes an unexpected event. It could be anything from a flat tire, to a medical emergency, to gloomy days of a job loss or losing a loved one. Having an emergency fund in place helps to deal with a crisis in a more sufficient manner. With different types of investment options available to you, ensure that your money is invested in the right instruments that offer good liquidity. It’s advised to keep aside at least six months of expenses in a liquid fund as an emergency fund.
- Insure yourself:Getting health insurance for yourself is very important, even if your employer provides you with one. This is so that even if you’re out of a job or you’re in between jobs, you would be still covered. Purchase a cover of at least Rs 3lakh as medical insurance. Unless you have a dependent, investing in a term life insurance policy might not prove that fruitful.
- Retirement planning:It is the 3rd most crucial part of creating a financial plan for a single person. PPF (public provident fund), EPF (employee provident fund) and NPS (national pension system) are good investment options for retirement, but they are undoubtedly not enough. It’s recommended to build a core retirement strategy with mutual funds so that you get equity exposure along with diversification of asset classes.
- Other investments:Your mutual fund investments should be aligned with your personal and financial goals You should avoid picking stocks based on tips. Ensure a healthy mix of equity, debt, gold instruments, money market instruments, etc. as per your asset allocations, investment horizon, risk appetite, and financial goals. The importance of investing is abundant; the earlier you realise, the better.
- Nominations and wills:This is an essential financial task, which is often ignored by several investors. Ensure that you have relevant beneficiaries and a will in place. Even as a single person, if you have assets or have created wealth over time, getting a will is a must.
Life as a happily unmarried person can prove to be fun if you have sufficient disposable income. Indeed, it’s effortless to live it up with credit cards, thanks to easy credit available in the market today. However, the biggest mistake an individual can make is racking up debt in the early years of their life. So, while it’s necessary to live a little, it is equally important to not get into a debt trap. Happy investing!