Chennai Money: Money Buckets for Personal Finance Management

There are various money buckets we need to keep the money, when it comes to money management. Here are the buckets, I could think of.

Income Bucket - is where all the income comes in. This would be the starting place of the money in our account. From here, all the buckets would get the money.

Debt Bucket - is where debt payments would go. Like Home Loan, Auto Loan, Personal loan would come under.

Expenses Bucket - is where the day-to-day expenses and planned expenses would go in.

Asset Bucket - is where the assets would come under.

Short-Term Bucket - is where the emergency funds would come. For example, normal savings account or cash at home or checking account money, which is easily accessible would be under the short-term bucket. Immediately accessible!

Medium-Term Bucket - is where next level of emergency fund is available. For example - if you have a not-so-easily accessible high-yield savings account - this would be the right bucket.

Long-Term Bucket - is where the retirement accounts - for both employer sponsored and individual retirement accounts and any other long-term accounts would come under.

Worst Case Bucket - is where all the insurance accounts would come under. ULIP products, term insurance and endowment insurance plans etc.,

Goals:

Go towards the goal of making Debt Bucket empty;
Increase the Income bucket;
Expenses has to be reduced;
Asset bucket has to be increased gradually;
Long-term bucket has to be filled gradually;
Short-Term and Medium Buckets has to be filled aggressively;
Worst Case Insurance is always mandatory if are the breadwinner and you have dependants.

Chennai Money: Money Buckets for Personal Finance Management

There are various money buckets we need to keep the money, when it comes to money management. Here are the buckets, I could think of.

Income Bucket - is where all the income comes in. This would be the starting place of the money in our account. From here, all the buckets would get the money.

Debt Bucket - is where debt payments would go. Like Home Loan, Auto Loan, Personal loan would come under.

Expenses Bucket - is where the day-to-day expenses and planned expenses would go in.

Asset Bucket - is where the assets would come under.

Short-Term Bucket - is where the emergency funds would come. For example, normal savings account or cash at home or checking account money, which is easily accessible would be under the short-term bucket. Immediately accessible!

Medium-Term Bucket - is where next level of emergency fund is available. For example - if you have a not-so-easily accessible high-yield savings account - this would be the right bucket.

Long-Term Bucket - is where the retirement accounts - for both employer sponsored and individual retirement accounts and any other long-term accounts would come under.

Worst Case Bucket - is where all the insurance accounts would come under. ULIP products, term insurance and endowment insurance plans etc.,

Goals:

Go towards the goal of making Debt Bucket empty;
Increase the Income bucket;
Expenses has to be reduced;
Asset bucket has to be increased gradually;
Long-term bucket has to be filled gradually;
Short-Term and Medium Buckets has to be filled aggressively;
Worst Case Insurance is always mandatory if are the breadwinner and you have dependants.

Ideal Portfolio: Asset Allocation : Chennai Money - Chennai Finance

I have been analyzing on the ideal portfolio and here is what I found:

# You need to plan for the days when you may have a family. Hopefully, you have already made your investment in a property. Keep no more than 50% of your money in property.

# You don’t need to have more than 5% of your money in savings accounts.

# Keep a decent amount of money (30%) in equity - you should not need that money in a hurry so you are unlikely to be a distress seller of shares. Equities as an investment may be good long-term investments but they can have one or two bad years and, if you need the money urgently, you may be selling into a distressed stock market.

# Keep some money (10%) in debentures and bonds. The interest from the money invested in fixed income instruments may be given to your parents or brothers and sisters in case they are financially dependent on you.

# And keep some (5%) in gold too. Gold is an international asset priced in US Dollars and sometimes acts as a hedge against loss of wealth due to a weak Indian Rupee.

This portfolio success would differ from person to person.

Ideal Portfolio: Asset Allocation : Chennai Money - Chennai Finance

I have been analyzing on the ideal portfolio and here is what I found:

# You need to plan for the days when you may have a family. Hopefully, you have already made your investment in a property. Keep no more than 50% of your money in property.

# You don’t need to have more than 5% of your money in savings accounts.

# Keep a decent amount of money (30%) in equity - you should not need that money in a hurry so you are unlikely to be a distress seller of shares. Equities as an investment may be good long-term investments but they can have one or two bad years and, if you need the money urgently, you may be selling into a distressed stock market.

# Keep some money (10%) in debentures and bonds. The interest from the money invested in fixed income instruments may be given to your parents or brothers and sisters in case they are financially dependent on you.

# And keep some (5%) in gold too. Gold is an international asset priced in US Dollars and sometimes acts as a hedge against loss of wealth due to a weak Indian Rupee.

This portfolio success would differ from person to person.