Not having enough money for an emergency
Emergency funds are used for meeting your basic monthly expenses, if at all your income stops, due to an unforeseen circumstance and you lose your job. Your emergency fund should be increased as your monthly expenses increase. If you do not have enough money for an emergency, you may have to use your long term investments, during the emergency. This might affect your long term financial goals. Invest your emergency money in a liquid fund.
Not setting aside money for retirement
Many citizens in our country, who are above 45, do not save for their retirement. They just depend on the EPF or the PPF savings, for their retirement. But this is very bad idea. Your PPF savings will not be sufficient for your retirement. Inflation eats up most of your savings. One of the best ways to save for retirement is by investing your money in an equity fund. Make sure your investment in equity is for the long term.
Not having adequate life insurance cover
Many citizens who are above 40 or 50 years, do not have enough life insurance cover. Make sure you have sufficient life insurance, which is 15 times your annual income. Also avail health insurance and a personal accident plan.
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