There are many benefits to being self-employed, but one of the biggest risks associated with it is the uncertainty of money. Here there is no freedom like the salary earners that every month a fixed amount gets deposited in your account. You do not get any gratuity or even the benefit of PF fund on retirement like employees.
Being your own business, you have to bear all the responsibilities yourself and you may need money at any time, in such a situation it is important for you to always have such a fund, which can be easily used in any emergency without affecting the business. Can you
Emergency Fund: In simple language, emergency fund is that amount which we can easily use in any difficult situation. According to experts, it is necessary for every person to have an emergency fund to meet his needs. This fund should be equal to at least 6 months of your monthly expenses.
Where should you invest the emergency fund?: The emergency fund should be kept in such a place, where you can easily withdraw that investment. The best option for this is to keep it in your savings account or get the flexi-sweep-in-deposit facility installed on your bank account, so that you can access the amount as and when required.
Health Insurance: In today’s era, health insurance is very important for any person. This will save you from any unforeseen financial expenses and provide security to your family. It has been seen that many a times due to lack of health insurance, all the accumulated capital of the families gets spent in the treatment.
Term Insurance: It has been seen in India that many times people consider insurance as an investment but here it is important to understand that insurance is done to remove any risk and investment to get higher returns. It is very important to keep the two separate. Term insurance gives you a huge insurance cover in a very small amount which will provide financial support to your family in case of any untoward incident.