Introduction
Managing finances as a freelancer can be challenging due to irregular income. At Sampann, we aim to help individuals like Anuradha, a 28-year-old freelancer, navigate these challenges and achieve financial stability. Here’s our comprehensive guide on financial planning tailored for freelancers.
Understanding Anuradha’s Financial Situation
Anuradha’s freelance income is not steady, making it difficult to budget for monthly expenses and long-term goals like retirement. Here’s our step-by-step plan to help her manage her finances effectively.
1. Securing Health Insurance
The first step in any financial plan is ensuring you have adequate health insurance. Anuradha confirmed that she is covered under her husband’s health insurance plan, which is a critical safety net.
2. Creating an Emergency Corpus
To handle months without income, we recommend Anuradha create an emergency corpus of ₹80,000 by investing in a liquid mutual fund. This fund can be built through lump sum investments or a Systematic Investment Plan (SIP).
Starting the Investment: Begin investing as soon as there is income from freelancing.
Purpose of the Corpus: This fund will cover 3 to 4 months of expenses during periods without income.
Maintaining the Corpus: Reinvest any future income to keep the corpus at ₹80,000 to manage future contingencies.
3. Planning for Retirement
Considering Anuradha’s monthly expenses are ₹20,000, she will need a retirement corpus of ₹1.5 crores by the age of 60.
Investment Strategy: To achieve this goal, we recommend investing ₹1,000 each in a large cap mutual fund and a multi-cap mutual fund through SIPs.
Compounding Benefits: By investing ₹2,000 monthly, Anuradha can accumulate a corpus of ₹1.5 crores over the next 32 years, leveraging the power of compounding.
4. Regular Portfolio Reviews
It is crucial to review the investment portfolio quarterly and seek expert advice annually. This ensures the investment strategy remains aligned with the financial goals and adjustments are made as necessary.
Conclusion
By following these steps, Anuradha can manage her finances better and secure her financial future. Starting investments now and maintaining a disciplined approach will help her achieve long-term goals, including a comfortable retirement.
If you have similar queries or need financial advice, feel free to reach out to Sampann at support@sampann.in. Let’s work together towards a financially secure future!
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