Can monthly premium payable be considered in monthly debts?
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Can monthly premium payable be considered in monthly debts?

Life shows us the strange face of every aspect with or without our knowledge.  One such aspect is a worry.  There is no person without worries.  The common problem which everyone faces is debt. Debt is the amount due to be paid to the lender.  Debt need not be the amount taken from a lender.  It can be the usage of services also.  For example, your mobile phone bill, or electricity bill. In fact, these are the payments which have to be paid to the concerned department almost every month without which the services will be terminated.  It is not that without these facilities you cannot live, but life will be complicated as you have become accustomed to these facilities.  Not only these bills, but you will also have regular bills that have to be attended. So, the point to be considered here is that any due amount which has to be paid towards the services availed by you can be referred to as debt.

When it comes to preparing a monthly budget regarding your income and expenses, some people sketch or list the payments to be paid towards premium or monthly installments of their savings in banks. They show it as an expense because they have to pay the amount from their pocket. These monthly premiums payable should not be considered as monthly debts.  The reason behind including these in the payables list is to ensure you pay the premiums correctly and on time.  The premium towards insurance policies or mutual funds is paid as an investment.  This investment in the future will earn you good returns, and you can utilize it in a fruitful way.  However, the premiums can be paid even quarterly, half yearly or annually.

Investing is nothing but saving, and most of the time this investment will come to your rescue while clearing your debts.  The only way of availing the complete protection from your investment is by doing compulsory saving based on the terms and conditions between you and the financial service agencies.  The idea of investment is good, but you should plan in such a way that your regular life is not disturbed by your decisions, and your future is secured properly. Your investment plan should be based on your income source.  The amount left after clearing all monthly expenses can be made used to invest.  So proper planning is very much needed to avoid financial pressures.

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What are precautions to be taken before investment?

Before investing your hard-earned money, you should take the following precautions:

  • Check the various investment policies created by the respective Government: Sometimes, the Government makes certain policies in favor of the common man. By investing in such policies, the common man gets the investment benefit.  Apart from this, he/she also can show this amount and get it reduced from their tax amount payable on their income.  Even though it is a compulsory saving, the person utilizing such opportunity can benefit a lot.
  • Read the policy terms and conditions: Before making any investment, in case you are planning to take any policy or want to invest in mutual funds, ensure you go through the terms and conditions and then only decide.  Every financial company makes sure that you have agreed to their terms and conditions and only then they proceed further.
  • Always invest in a well-known financial company: The world is full of fraudsters. So, when you are investing your hard-earned money, check and recheck before investing.  Ensure the financial company is genuine and is listed as per the government conditions.
  • Never decide on hearsay words: Many people to earn income from you may say many things which are not possible in reality.  So, whenever any financial advisors of a particular financial company approach, check the details with the company also and ensure both the details are the same.  Else, you will land in paying the amount to the person, and the company has no record of it.  You will be left with a loss.

What are the ways of investment?

Some companies provide valuable advice regarding investments and how to make use of it in debt crises and this they do it to motivate people to make more investments.  Once such link is where you not only get a suggestion to reduce your debts but about how to make a good investment.  Some of the ways of investing are:

  • You can invest in insurance policies– whether life or medical both are beneficial. In a life insurance policy, you can benefit it only after the end of the tenure or your family will befit in case of your death.  Whereas in a medical insurance policy, you and your family can avail only medical treatment facility from the health clinics listed in the investment policy.
  • You can invest in mutual funds: Your investment is again reinvested by the asset management team of the financial company you have approached.  They reinvest it in the share market, and whatever profit/loss is earned during the transaction it is being transferred to you after deducting their administrative charges.  One thing to be ensured is that the financial company should be listed as per the government rules and regulations.
  • Stock market: The good idea to invest your money but at your own risk.  When you are planning into investment in the stock market, you should have a thorough knowledge of how things are handled there.  Every single detail about the various share values should be known.  In case you have a problem in dealing with the transactions, you can always hire a person to do this, and you can approach a person who has relevant experience in such business.
  • Investing in real estate is also a good option. Nowadays, the land rate is growing at a good rate.  The only precaution to be taken before investing, check all the legal documents related to the land and if there are no litigations, go ahead and purchase the land.  Wait for the right time and then sell it to make a good fortune.
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The thought of investing is a very good start.  Don’t break the flow fearing the consequences.

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