What is Cybersecurity Insurance?

Cybersecurity is one of the modern emerging industries. Companies that buy this insurance are known as early adopters. You should know that the policies of Cybersecurity change from one month to the next, given the dynamic and fluctuating nature of the associated cyber-risks. However, the underwriters of these policies limited data so that the risk models can be formulated and policy coverages, premiums and rates can be determined.

What is cybersecurity insurance?

Cybersecurity insurance is a contract that one entity can buy to decrease the financial risks of an online business.

Why is cyber insurance important?

Always remember that losing electronic data or compromising any data can affect a business badly, such as loss of customers & revenue may occur. Cyber liability coverage plays a crucial role in keeping businesses protected against cyber event risks. It can also help to reduce cyber attacks and incidents. How does cyber insurance work?

Suppliers offering business insurance, including E&O insurance, business liability insurance, and commercial property insurance, sell many insurance policies. In most cases, these cybersecurity insurance policies come with first-party coverage which can be applied to losses that a company may suffer due to cyber incidents.

Who needs cyber insurance?

A few businesses make, store and manage electronic data like customer contacts, customer sales, PII, and credit card numbers. Cyber insurance is beneficial for these e-commerce businesses. Moreover, it is advantageous for those businesses that used to store customer details on a website.

What is Cyber Insurance Coverage?

It can offer coverage for these conditions including:-

Identity Theft: 

You can get coverage for the defense cost of any claim that the affected party raises. Moreover, it offers coverage not only for the prosecution cost against 3rd party, but also for the costs of documents' photocopying, etc.

Cyber Stalking: 

It offers coverage for the incurred cost for any criminal case's prosecution against a 3rd party.

Malware Attack: 

This plan can offer restoration costs if malware attacks your computer. Besides, it gives the defense cost of any claim raised from the affected party.

Phishing: 

It gives coverage of financial loss caused due to phishing acts by third-party.

What does cybersecurity insurance cover?

• Informs customers if any security breach has occurred. 
• Pays legal fees imposed due to privacy violations. 
• Recovers compromised data by hiring computer forensics experts. 
• Restores customer identities. 
• Recovers the stolen data.

What Does Cyber Insurance Not Cover?

These are the following which the insurance doesn't cover.

• Damages that are caused due to negligence to safeguard like credit and debit cards, bank accounts, and the internet connections, details.
  
• It does not cover bodily injury, diseases, death, or damage to substantive items. 
• The insurance doesn't cover any loss caused due to electric disturbance, mechanical failure, breakdown, or media failure.

Benefits of Cybersecurity Insurance:

• It can offer protection against cyber threats & crimes 
• Financial cybersecurity insurance cost coverage 
• Protects big and small companies from a cyber-attack

How can you raise a claim under cyber insurance?

• The insured must inform the insurer when they come to know about any cyber incident. A few insurers tie up with third-party service cybersecurity insurance providers so that they can raise the claim. 
• Then an investigator is assigned so that the incident can be analysed and then the investigator chalk out a temporary resolution plan. 4-5 hours is the turnaround time. 
• You need to hire a cyber expert for the incident analysis when you find that the incident is severe. But, In-house cyber experts are unable to do this for keeping transparency. 
• Mostly the concerned parties engage in the resolution's discussion. The Insured's 2nd opinion is obtained about potential costing ascertained to resolve the attack. When any affordable option is available, the insurer will take it. However, the action's final plan can be drawn. 
• Information is reported to the claiming team again. Then, the team reviews these to approve the final post.

How can you renew Cyber Insurance?

If you are willing to renew the insurance coverage, you should follow these steps.

• First, you need to go to the insurance website. 
• After that, your task is to fill in the policy number so that you can access the account. 
• After coming to the website page, find the "Renew" button. 
• It is also possible to add any add-ons or remove any if required before renewing the plan. 
• The premium amount will fluctuate based on the add-on's addition or removal. 
• After that, you should hit the "Renew" button. 
• You can pay now using a debit/credit card, UPI, or net banking. 
•  After completing payment, you will get the updated policy documents in your registered email ID from the insurer. Besides, you will get a hard copy from the insurer to your registered address. 
• Ensure that you renew your insurance on time so that your cybersecurity insurance policy won't get canceled.

How can you choose a cybersecurity insurance policy, and how much does cyber insurance cost?

The pricing depends on the annual revenue of the insured entity and industry. If any entity wants to qualify for coverage, it must submit to a security audit by the insurance company. It can give documentation using an approved assessment tool. However, several companies don't want to select this insurance for the uncertain return on investment (ROI).

CISA, or Cybersecurity and Infrastructure Security Agency, helps to encourage businesses so that they can enhance their cyber security for additional coverage at budget-friendly rates. In this case, you should know that this agency operates under DHS or the Department of Homeland Security. If your company is willing to select a policy, it must review policy details to confirm that it comes with all essential protections.

Tips to Enhance Cyber Security:

These are a few tips that you should follow to enhance cyber security.

• You should follow the cyber security measures. 
• Try to allocate the cost of cyber insurance to your organization's budget. 
• You can enhance its expertise.

Conclusion:

Our world has entered into an era of cyber attacks, and there are plenty of viruses, breaches, and other attacking forms. But cybersecurity insurance plays a vital role in keeping your business protected.

Frequently Asked Questions:

Q. What is cyber insurance called?

Cyber insurance is called cyber liability insurance or cybersecurity insurance.

Q. What are the 4 categories of cyber and privacy insurance?

Its primary focus is to keep your company secured from the primary risks through these four insuring agreements:

• Network security and privacy liability. 
• Network business interruption. 
• Media liability. 
• Errors and omission.

Q. Is cybersecurity insurance necessary?

It helps to protect all kinds of data from theft and loss.

Personal Finance Basics - Ultimate Guide

Personal finance is a term that includes various concepts like saving, managing money, investing, etc. Besides, the term covers banking, budgeting, mortgages, investments, insurance, retirement planning, and tax planning. You can say that it comprises the entire industry that can offer people financial services. In addition, it can recommend them about financial and investment chances.

In simple words, it is a personal finance management that a family unit does for saving, spending money, etc., taking different financial risks and future life events. If you want to plan it for yourself, you must consider the suitability to your needs. For example, you should consider banking products like checking, savings accounts, credit cards, and consumer loans. In addition, it is essential to consider companies' shares, bonds, mutual funds, and other investments in private equity along with the insurance, including life insurance, health insurance, & disability insurance. Moreover, you should consider social security advantages, retirement plans, income tax management, etc.

What is Personal Finance?

The Personal finance meaning is how to manage money, save and invest.

Principles of Personal Finance:

Remember that the circumstances have differences based on patterns of income, wealth, and consumption needs. Besides, different countries have different tax and financial laws. In addition, the market condition depends on geographic location. It indicates that advice for you may not be suitable for another person. In this case, you can take the help of a personal finance advisor. They can provide personalized advice in challenging situations. Moreover, if you are a person with high wealth, you should hire someone like him.

But there is an argument between University of Chicago professor Harold Pollack and personal finance writer Helaine Olen. They said that advice in the US can boil down to some easy steps.

• You should pay the credit card balance off each month ultimately. 
• In addition, you should save 20% of your income. 
• Besides, you should make an emergency fund. 
• Try to contribute more to tax-benefitted funds, including 401(k) retirement funds, individual retirement accounts, and 529 education savings plans.

While investing savings:

• Ensure that you must not trade individual securities. 
• Try to avoid high-fee managed funds. 
• Remember that you have to find mutual funds of low cost. 
• Whether you use a financial advisor, you need them to commit to a fiduciary duty to act in your best interest.

Personal Finance Planning Process:

Financial planning is a crucial component of personal finance. It is a dynamic procedure that you must monitor and re-evaluate daily. Usually, it involves five steps.

Assessment: 

If you want to assess your financial situation, you have to compile easy versions of the financial statements like balance sheets and income statements. Using a personal balance sheet will provide you a list containing values of your assets like car, house, clothes, stocks, bank account, and cryptocurrencies. You can list private liabilities like credit card debt, bank loans, and mortgages. Remember that a personal income statement can list your income and expenses.

Goal Setting: 

You should always target many goals, even if it mix short- and long-term goals. For illustration, you may have a long-term goal like retiring at age 65 with a net worth of $1,000,000. On the flip side, a short-term goal is like saving up money for a new laptop or computer to buy in the upcoming month. When you set a goal, it will help you to make financial planning. You should set your goal to meet specific financial requirements.

Plan Creation: 

The plan asks you how you should accomplish your goals. It means you should decrease unnecessary expenses, enhance the employment income, spend money in the stock market, etc.

Execution: 

When you want to execute a plan, ensure that you must need discipline and perseverance. If necessary, you can take help from professionals like accountants, financial planners, investment advisers, and lawyers.

Monitoring and Re-Assessment: 

The plan should be monitored to adjust planning and reassess it. Goals that most adults have include:-

• Pay off credit card/student loan/housing/car loan debt, 
• Spend the money for retirement, 
• Spend the money on child education 
• Pay medical expenses.

Why Do You Need Personal Finance?

People will need it for different reasons, including:-

1. No Formal Education:

Most nations have a formal education across different disciplines. People pursue study to earn a livelihood. What they have learned will be available as an outcome in the form of money. Although we know making money is our primary motive, no formal education still exists at elementary levels like schools or colleges. Students don't learn how to manage money. But it is essential to know the gap in the education system that doesn't let us see how a person should manage their money. That's why we should learn personal finance from an early age to differentiate between needs vs. wants. According to this, you should plan accurately.

2. Shortened Employable Age:

It has been years since people notice the need for change, the jobs which need manual intervention or are mechanical. But these are becoming redundant very quickly.

Many employment chances shift from nations with higher labor costs to countries with lower labor costs. It happens several times when employees who don't have enough skills in the middle management category are replaced by fresh talents. The reason is that the upcoming talents know new modern technologies to fix problems. As a result, they become more useful for companies than the old ones. Besides, the company can also hire them at low prices, and they are also valuable to the company.

Economy health of any nation drives automobiles, chemicals, construction, consumption, and demand. We have seen that if economies stagnate, some industries suffer more than others. It can result in companies that rationalize the workforce. You may lose your job and become unemployed for a considerable time. These are reasons why the legal employable age of 60 is decreasing.

That's why you should begin planning for your retirement and save money for retirement purposes, which is why you need so.

3. Increased Life Expectancy:

Although there are plenty of developments in healthcare, modern people are still living at an older age than their forefathers. Therefore, gradually the average lifespan changes over many years. Therefore, people in developing economies live much more life. While the average life expectancy was 60, it is now 81. Increased life expectancy but with shorter employable age requires personal finance.

4. Rising Medical Expenses:

Medical expenses have been increasing exponentially over the years. For example, expenses of the cost of drugs, hospital admission care and charges, nursing care, specialized care, and geriatric care have increased too much. Several medical expenses don't have insurance policies, including private/individual insurance coverage or federal or national insurance coverage.

If you are from the United States, you will get insurance coverage from employers, private insurers, or the federal government. Senior citizens get Medicare, while people will lower income levels get Medicaid. However, you must observe the extent of the Medicare program with the rising US fiscal deficit and a large proportion of the geriatric population.

But if you are from other developed markets like the EU, most medical care is reimbursed nationally. As a result, the national healthcare budgets started to be tightly controlled. Besides, several new expensive therapies exist which don't belong to the national formularies. It indicates that patients don't get access through government policy. They need to spend money from their pocket to avail these medicines.

Regarding developing nations like India and China, approximately all expenses are out of pocket. It is because no overarching government social security system exists covering medical expenses.

These are a few reasons you should have medical, accidental, critical illness, and life coverage insurance. In addition, the need for personal finance is also immense.

Five Aspects of a Complete Financial:

Savings: Ensure that you must save money as savings to cover sudden financial needs.

Investing: It is essential to grow money to achieve your aspirations.

Financial Protection: It ensures that your family and you can sail through the most challenging times.

Tax Planning: The correct tax planning, like making proper expenditure /investment, helps to reduce taxable revenue. Thus, you can save plenty of money each year.

Retirement Planning: It is vital to ensure you have saved much money for your needs during the twilight years.

Let's discuss what these are in detail.

1) Saving:

You might need a lot of money suddenly. For instance, your car might break down, or you have lost your job. However, you can deal with these emergency events with sufficient savings to cover the need. According to the thumb rule, the fund for the emergency needs has to be three to six months of your expenses.

• You can choose Debt instruments like Liquid Funds to park the money for emergency requirements. 

These are the three reasons: 

 

• These provide better returns than savings accounts though you don't get guaranteed returns. 
• The funds are highly liquid. Therefore, it is possible to withdraw the money after seven days. 
• These have negligible credit and interest risk. That's why the money is safe.

2) Investing:

You might confuse investing with saving or find them similar. Hence, you should ensure that saving means setting money aside. On the other hand, investing money indicates putting money to buy any asset ( stock, bond, mutual funds, etc.) to increase your money's growth.

Regarding investment, mutual funds are a good choice if you do it properly. Remember that you must be conscious while selecting the fund in which you will invest your money. Otherwise, you can find it counterproductive. It is vital to make your investment according to the need of investment and horizon. That's why you should establish a timeframe around it. After that, you should choose a mutual fund suitable for your investment timeframe.

Now, a question arises which fund should you select according to your financial goals?

Short-Term Goals: 

It indicates those goals you have to achieve within three years. You may need to arrange funds to save for a trip or a phone within this timeframe.

• Best investment options: Liquid Funds and Ultra short-term funds are the best investment options.

Mid-Term Goals: 

Have you set a goal that you want to avail yourself of within three to five years? If yes, then we can say it is a mid-term goal. Giving a down payment for a house is an instance of it.

• Best Investment Options: Hybrid Funds, ELSS, Short Term Debt funds like Banking, and PSU Debt Funds are examples of investment options.

Long-Term Goals: 

If you want to set any goal for a minimum of five years, it is referred to as long-term goals. Some long-term goals are retirement, children's education, and kids' marriage.

Best Investment Options: Multi Cap Funds, NPS (only for retirement), and Large Cap Funds are the best investment options.

3) Financial Protection:

We might weave several dreams in life and create investment plans to turn those dreams into reality. But the same can become a liability unless we protect them with a safety net. That safety net is insurance.

Four types of insurance exist, including:

Term Insurance:

This life insurance ensures your family does not have to go through financial hardship if you die early. The term insurance sum is higher than other health insurance products. Whether you calculate it accurately, it is possible to compute the regular expenses of your family. In addition, you can account for a retirement corpus for your partner. Besides, you can cover various liabilities, including home loans and kids' education.

Health Insurance and Critical Illness Insurance:

If you have health insurance, there is no need to pay from your pocket if you or your family member has taken ill. It can cover all costs, including hospitalization, medication, pre, and post-hospitalization expenses, etc. In addition, you can choose vital insurance with your primary health policy. If you diagnose with one of the critical illnesses mentioned in your policy, the insurance company might spend money to assure you the sum assured.

Mortgage Protection Insurance:

It can pay off the mortgage when you die during the mortgage term. Besides, it ensures that the loan or mortgage for a home, car, property, etc., is not becoming a liability for your family if you die early.

Personal Accidental Insurance:

If you encounter an accident and get injured seriously or partially, you will get the money from the insurance company. They help you to cover the expenses for treatment and loss of income. But your family will get the payment if you die during the accident. The payable amount relies on the fatality of the accident.

4) Tax Saving:

People must pay taxes according to tax slabs. If you want to deduct the taxable revenue to a certain extent, you must invest in the correct fund. Seventy exemptions and reduction choices are available via which you can bring down our taxable revenue.

Two famous sections to reduce taxes are as follows:-

Section 80C: It is the largest pool for tax reduction. People can claim to reduce up to Rs 1.5 lakh under the section to create different investments and expenditures. Some well-known tax-saving instruments include EPF, PPF, NSC, NPS, ULIPs, children's tuition fees, life insurance premium, five-year tax saving FD, ELSS, Senior Citizen tax saving instrument, Sukanya Smriddhi Yojana, and home loan principal amount.

Section 80D: You can do a similar thing under Section 80D. Regarding the premium amount, it is possible to spend money on a health insurance policy. Other avenues exist which can decrease your taxable income.

5) Retirement Planning:

You should know that your most vital life stage is retirement. Ensure that it may be miserable or blissful, but it depends on how you plan for it. It will be true if you want to do any financial planning. You need to follow the two-step method hence. The first one is saving for retirement. On the other hand, the second option is creating revenue from the assets during retirement.

The two steps are as follows:-

Step 1) Building A Retirement Corpus:

You must save money for your retirement time. There are mainly two reasons – loss of income and increased life expectancy. Suppose you retire at 60 and live up to 85. Have you planned how you will spend the remaining twenty-five years after retirement while you won't have any stable income?

Considering inflation is another factor meaning the rise in prices of goods and services for daily use. During that time, the expenses will be increased after retirement. Suppose the monthly expenses are Rs 35,000. But it can be Rs 80,000 per month in 20 years. Remember that you must not maintain similar living standards.

Creating a fund big as a retirement corpus is always a lifelong process. Therefore, you should begin saving money quickly for your betterment. EPF, NPS, and Mutual Funds are the investment options for creating a retirement corpus.

Step 2) Generating Income during Retirement:

While it is vital to ensure that you save sufficient money for your retirement while working, it is also essential to channel that corpus after retirement. Try to make the correct investment to ensure that you will have a steady income. Some good investment options include STP withdrawal/transfer from Mutual Funds, life insurance annuity, and rental income.

What Is A Personal Finance Course?

It lets you know how to manage money and other forms of wealth. For instance, it means how spending money affects your accounts, use of your credit cards, the way through which interest rates make or break your portfolio, etc.

How Long Is A Personal Finance Course?

It is a course of six week where you need to learn short videos embedded with exciting learning exercises. This course enables students to practice their learning.

The Bottom Line:

You should control your finances. In addition, you should have the power to make a life choice except worrying about money. If all aspects of an entire financial picture are in one frame, it can confirm that your financial future is ideal.

Frequently Asked Questions:

• Q. What are personal finance examples?

Examples of personal finance including how to budget, balance a checkbook, save for retirement, buy insurance, plan for taxes, and make investments.

• Q. Why is it important?

Managing your money via budgeting, investing, and savings is essential. Long-term planning with potential financial risks is included in this case.

• Q. What is the most essential part of it?

Cash flow management is a vital part of it. The term means how much money is going in and where that money goes.

Sri Lanka Economic Crisis

Sri Lanka economic crisis is for the bad external advice and misguided policies. The nation has faced the issue due to a severe balance of payments (BoP) problem. Besides, the reserves of foreign exchange are depleting rapidly. Nowadays, it has become hard to import vital consumption goods. As a result, the nation can't repay past debts. In the article, we have let you know about the causes of the recent problem and documented the roles of different groups.

If you want, you can find out the roots of the issue of colonialism and the post-war developmental pathway. In this century, the country's fortune in economy has been tied continuously to exporting primary commodities like tea and rubber and garments. With the help of the primary commodity exports, tourism and remittances, it mobilized foreign exchange reserves, and it used these to import essential consumption items like food.

Sri Lanka Economic Crisis reasons:

1. In 2009, the nation emerged from a 26-year long war. People expected that the growth in economy would revive. The country's post-war GDP growth was high for pent-up demand between 2009 and 2012 at 8-9% per annum. 
2. After the global fall in commodity prices, the economy was on a downward spiral. The country experienced a slow down in exports and a rise in imports. After 2013, the average GDP growth rate became halved. 
3. The government of Mahinda Rajapaksa was under a $2.6 billion loan obtained from the IMF or International Monetary Fund in 2009. The budget deficits were very high in the war. 
4. Besides, the major fight of 2008 drained its foreign exchange reserves. In 2009, they obtained the IMF loan in this context, but they did a condition, the budget deficits need to be decreased to 5% of the GDP by 2011. 
5. While there was no increment in growth or exports, and the nation was experiencing the continuing drain of foreign exchange reserves, United National Party (UNP)-led coalition government took another US$1.5 billion loan from IMF. They approached the IMF in 2016 for three years between 2016 and 2019. The condition of IMF was that they have to decrease the fiscal deficit to 3.5% by 2020. There are other conditions included also— the tax policy and tax administration; control of expenditures; the commercialization of public enterprises; flexibility in exchange rates; improvement of competitiveness; and an accessible environment for foreign investment. 

GDP, Debt and Savings Rate:

The GDP growth rate shrank from 5% in 2015 to 2.9% in 2019. Besides, the investment rate was 31.2% in 2015, but it fell in 2019 and came down to 26.8%. In addition, the country faced a change in the savings rate from 28.8% in 2015 to 24.6% in 2019. The Government revenues get reduced to 12.6% of the GDP in 2019 from 14.1% of the GDP in 2016. Moreover, the Gross government debt experienced a rising GDP from 78.5% in 2015 to 86.8% in 2019. According to Jaishankar, India is working extra time to offer swift assistance to the nation.

Incidet of 2019:

In 2019, the country witnessed two major shocks to its economy. First, they faced the Easter bomb blasts of April 2019 in churches in Colombo, and the accident caused the death of 253 people. Tourists didn't prefer to come after the incident in foreign exchange reserves. And the second incident was when a new government replaced the UNP-led government in November 2019. Gotabaya Rajapaksa was the leader of the new government, named as the Sri Lanka Podujana Peramuna (SLPP).

During their campaign, the new government had promised the people to reduce tax rates and offer wide-ranging sops for farmers. It was Gotabaya Rajapaksa who implemented the plan to slash taxes.

The new government decreased the VAT or value-added tax rates from 15% to 8% in December 2019. Besides, it raised the annual threshold for VAT registration from LKR 12 million to LKR 300 million. In addition, they raised the annual income threshold for a waiver from LKR 500,000 to LKR 3,000,000. They also ruled out the nation-building tax, the PAYE tax, and the economic service charges.

Affect of Covid-19:

According to the estimate, a 33.5% decline was there in the registered taxpayers between 2019 and 2020. They witnessed GST/VAT revenue halved between 2019 and 2020. In 2020, the situation became worse for the COVID-19 pandemic. All the rubber, tea, and garments exports faced a tough time. The country spent, on average, about $260 million on fertilizer subsidies per annum.

The Gotabaya government came up to give a solution to stop foreign exchange reserves from draining. The country became a 100% organic farming nation overnight.

Although they withdrew the policy in November 2021 after the farmer protest, it pushed the nation to the brink of a disaster. The Agricultural scientists warned the Gotabaya government about the potential losses from the organic farming policy. They said the government that yields can drop by 25% in paddy, 35% in tea, and 30% in coconut.

Conclusion:

The country's economy grew slower than usual at 1.8 % in the last quarter of the 2021 financial year. According to the data of the government's statistics department, the entire growth of the year was 3.7 percent. The nation's central bank had projected a growth of 5 % for the year.

Frequently Asked Questions:

Why is Sri Lanka in an economic crisis?

When it was 2010, the nation faced a sharp rise in foreign debt. In 2019, it reached 88% of the country's GDP. Besides, the COVID-19 pandemic has increased the crisis. In 2021, the foreign debt rose to 101% of the nation's GDP result of which the country faced an economic crisis. 

What are the reasons for the situation?

The five main reasons for the crisis are as follows:-

• The five broad causes of the situation are: 
• External Economic Attack. 
• External Information Attack. 
• Breakdowns. 
• Psychopathology. 
• Human Resource Factors

Is the nation in financial trouble?

The country is experiencing an unexpected economic problem. The issues of the nation have been increasing for years. Besides, the country is facing annual inflation in double digits. Their rupee has plunged to a record low against the U.S. dollar.

Eight Valuable Personal Finance Tips for Beginners

The amount you earn has to be spent as living expenses exist. The desire to grow wealthy beyond your means also exists. Savings is the weapon to achieve it, and careful planning is most important. Please find below ways of accomplishing this as personal finance tips for beginners.

• Begin Early:

Everything in life is about early starts. Saving money is no exception to this rule. Irrespective of the amount you can save, the habit and attitude to saving are essentially combined with an early start.

A plan of action does not require a big plan, but the early kick-off matters. It may be in trickles first, but the savings compound into a more considerable value with time passing by, and it is the result that matters in the long run. Delays in such matters would never help, and procrastination would result in lesser savings only and is the best personal finance tip for beginners.

• Prioritize Saving before Spending:

As a growing child, your parents must have taught you the value of money. Moreover, they would have inculcated inside you the thought that to spend money which you have with you. Nowadays, credit cards are available to you, which can reverse your policy of saving. The idea to purchase on credit cards is good provided you pay up the purchase amount before a month or the date the bank starts levying interest.

Just imagine you purchased a Television set and you are paying interest every month! The Television becomes a costlier investment, and there would be excess cash outflow.

The cardinal rule is to allocate the savings and reduce that with your income. It's a bad idea to spend first and save whatever is leftover.

• Be Your Own Financial Advisor:

Saving money is only a part of the deal. The other part lies in managing it wisely. There are many ways to lose those savings, as others become aware of your wealth. They may advise you to invest in profitable ventures, but their end-interest is only the commission they earn through it. As a personal finance tip for beginners it is best to do your research and analysis by acquiring knowledge through the internet or direct investigation and then decide.

On the same note, it's advisable to keep more than an eye on your bank accounts. You can trust Banks to a large extent, but even they may charge you arbitrarily. In such cases, if your account is debited, you can approach the bank and have it reversed. Thus, you become the Finance manager of your savings.

• Budgets:

You may not be in the habit of noting down your cash inflows and outflows. You would be shocked to see that your savings are going down at the month-end even though you have been cautious in spending money.

The only solution is to budget your expenses initially and keep checking on them, not exceeding them. All expenses have to be meticulously noted down, and you would soon know the excessive expenses. When precautions are taken, you can achieve your goal of savings.

• Health Insurance:

You cannot be confident that you will stay in good health always. Neither can your family parents. You may feel that an expense like a Health insurance premium would pull your savings down, but you're mistaken. In case of a sudden accident, a visit to the hospital is bound to cost you an enormous amount.

You may have health insurance through your office; never hesitate to take a few insurance policies on your family, including ageing parents. The prevention you would realize is better than cure.

• Saving for Different Purposes:

You may be a salaried person and well equipped to meet all your expenses, resulting in savings. Savings generally protect you with financial health once you retire or slip into old age. But wait! There are other purposes apart from that. You may desire to go on a vacation or perhaps buy a farmhouse etc. This cannot be met with your available savings but create a special fund to meet those planned schedules in the future.

It is best to deposit these extra savings in an account with a high yield so that money value is not eroded due to inflation. Even a deposit for a short time in deposit schemes like ' CD' (certificate of deposit) is a good idea.

• Be a Knowledgeable Taxpayer:

If you are a salaried person, you ought to know the tax bracket you would fit into. Tax is deducted at source when you work in a reputable organization and your ' Take- home ' is lesser to that extent.

There are many sites on the internet which has tax calculators. All you have to do is punch in your salary, and the tax calculator would let you know your net salary.

• Debit cards Vs Credit Cards:

Debit cards are helpful as you need not carry the money in your bank account. You can only spend within that limit or balance in the secure account.

Credit cards allow you to buy anything or spend money that is not yours. If you can meet that commitment without rolling it over, your savings will not be affected. If you cannot pay that, it will attract a very high rate of interest which will erode your savings. Moreover, if you do not meet the bare minimum charge notified to you by the bank, it would attract late/delayed fees. The tip is to spend when you can meet it within the deadline.

Conclusion:

Financial awareness wins the day and not how high you earn. Tax structures keep changing every year, and money value keep depreciating year after year. It's best practice to know which account to open in the bank or elsewhere to mitigate inflation. If you follow this entire personal finance tip for beginners you will continue to live comfortably after retirement.

Personal Finance Management Key Aspects

Personal Finance Management is all about managing expenses monthly or daily and saving a reasonable amount for the future. Every single person should do this management for healthy and quality living. To effectively organize your money for future needs, consider some of the significant components of your finances.

In this personal finance blog post, we are going to discuss five significant vital aspects of personal finance. So, read the post till the end to draw a better picture of your finances. 

 Components of Personal Finance

These are the five key components of personal finance:

• Insurance for emergency 
• Tax Planning 
• Expense Management 
• Savings are essential 
• Investment

Let's dig in deeper and study these major aspects thoroughly:

#1 Insurance for Emergency

One can do financial protection via insurance to get over hard times. But people don't appreciate this option. Many people don't believe in health insurance or basic insurance. Insurance is an essential element to sail you and your family from difficult times or events. These are the insurances which we all need, these are:

• Term Insurance 
• Property Insurance 
• Health Insurance 
• Personal Accidental Insurance etc.

#2 Tax Planning

Tax planning is another factor that needs to be considered, as some take it for granted. With the right approach, we can minimize our taxes. Pay attention to how much you are spending, over expenses, etc. To grow your money, you can put money in tax-advantaged investment accounts and reduce your unnecessary expenses. One can easily reduce taxable income via tax deductions and exceptions. The most popular sections related to it are Section 80C and Section 80D.

#3 Expense Management

We should track our expenses, whether day-to-day expenses or unforeseen ones. One can fix and keep aside some amount for these unexpected expenses. You can even create funds for vacation, travel, etc. By keeping a track record of all your expenses, you can maintain a decent balance in life. 

 #4 Savings are Essential

Saving is the left money after allocating money for our monthly or essential expenses. It is well said that no matter how small your income is, one must save some portion from it. Make it a habit, and it will benefit you in hard times or for long-term investments. Do savings, and in this way, you can build a safe and secure future.

#5 Investing

Many people think investing and saving are similar, but that's not correct. Saving and investing are different components. Investing is like getting money, i.e., stock, mutual funds, etc., to make your money increase. Investing is generating money from money. One of the best investing options is mutual funds. And some other options are fixed deposits, real estate, stocks, etc.

Final Verdict

To build a safe and robust future, all these aspects are must to consider. With these, one can draw a perfect picture of a financial future. Do personal finance now to make better plans and decisions for the future. A correct balance between expense, income, saving, and investment is necessary to optimize a person's financial management.