When was the last time you were absolutely confident about the future?

Yes, most of us have many plans for growth in business, health, wealth, knowledge, and family. And we are confident that in the future, we will be in a better position than now. This confidence drives us in life. This makes us go the extra mile to achieve things. In this fast journey, growth is the only option. that is the only thing that will give us a better tomorrow.

Growth happens only when how good we handle our losses. However we bullish about our growth, it is important to make plans for managing our risks and losses

I would like to highlight the two most important things; we all should ensure in our life.

Emergency Fund

It is the absolute basic of Finance. If you cannot do anything else at least do this first step. From school days we know the importance of savings. Yet we are not serious about this. Most of us want to get a new car, a new phone, new something that fulfils our wants. All this is fine, only when you have an emergency savings of at least six months of your expenses.

The families who did not have this six month of emergency fund suffered a lot in lockdown. Calculate the absolute least expenses required for you and your family. This does not include, upgrading to the latest phone or eating out in an expensive restaurant. Keep your expenses to necessary items, such as grocery, school fees, mortgage payment, insurance payment, etc.

Now add these monthly expenses to arrive at a one-month value. Have at least six months of savings. And keep this money is liquid as possible. Meaning whenever the emergency, you or your family should be able to withdraw money immediately.

Insurance

This is the one thing many people did not have much knowledge of. Almost everyone knew about the importance of savings, but very few knew about the importance of Insurance

I was shocked to see many families, wealth accumulation over a decade, eroded in an unexpected loss of life or huge health expenses. Insurance is the only effective way to protect your wealth from various risks and losses. I cannot stress this enough.

As a basic, the family’s breadwinner should have at least 10X of his/her annual income as Life Insurance cover. This will ensure, the family can survive after the breadwinner’s loss.

Next have Health Insurance for all the family members. This will ensure that in case of any health emergency, your hard-earned savings are protected, and the Insurance company will cover the cost for the fraction of the premium.

Even when you have Insurance, remember this “Prevention is better than Cure”. So, keep yourself healthy with a good lifestyle and healthy foods. Keep your health parameters in the normal range and insurance companies will charge you lower premiums.

In essence, having emergency funds and insurance are the two most important things. This will ensure our hard-earned savings are protected against unexpected losses and our growth plans are not moved back by a few years due to an unfortunate risk.

Now lead your life with confidence.