It was an interesting article in the toi about financial plans. They showed a survey done for a family of dual income spouses and where they are spending their money.
If you take a look at their overall plan they are only putting 4% of their income into some sort of saving instrument or asset creation. This is the life insurance premium.
A lot of people say that even paying for a car is creation of an asset... and I would say to them that it is not true. A car loan is not an asset... and neither is a car. As soon as you buy a car its value immediately depreciates.
Unfortunately the chart below is a lifestyle that most families have today. Both spouses are earning and splurging. Not creating a nest of potential savings for themselves for retirement.
I will in my next few blogs go back to basics and talk about some key concepts on financial planning... health covers, emergency funds and as I learn more .. estate planning
Getting carried away and spending more than what you can afford to is NOT simplefinancialsense.
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