10 Commandments for a Financially Secure Future

By | February 24, 2022

Behold! The 10 commandments that can help you part troubled financial waters so you can walk confidently into the ‘promised land’ – a financially secure future!

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While there’s no one-size-fits-all approach to building a financially secure future, there are certainly some best practices that can help. Remember that while these cannot be carved in stone, they can certainly help part troubled financial waters so you can confidently walk through to the ‘promised land’ of financial security.

1. Thou shalt be financially literate.

When it comes to finance, applied knowledge is power. Don’t shy away from learning about finance – budgeting, saving, investment, tax management and so forth. Financial intelligence will unlock the path towards a financially secure future.

There’s no dearth of information out there in a range of formats – blogs, vlogs, online courses, YouTube videos, Insta Reels, mobile apps. Choose a medium that best suits you and you’ll be surprised at how quickly you can turbocharge your money management skills. Financial literacy is a solid starting block in your race towards financial security.

2. Thou must know thy money goals.

A sound financial plan cannot be chalked out without knowing your short, medium and long-term financial goals. Think about the milestones you want to reach and the time frame for each – perhaps it’s higher education, a new car, a house or a lavish holiday on the Alps.

Link your savings and investment plan to each of these goals in order of priority. For instance, if you want to take a week’s holiday in the Maldives in December, it will move to the top of your priority list so you can start saving more towards it than, say, buying a new car which you don’t quite need right away.

Additional Reading: A 5-Step Approach to Deciding Your Financial Goals

3. Thou shalt save systematically and smartly.

Build your savings in a systematic, disciplined manner. This savings plan should include creating an emergency corpus which will cover between three to six months of your expenses (or even up to a year if you are the sole breadwinner with dependents). Emergencies have a way of sneaking up on you when you least expect them with no calling card whatsoever.

With your emergency fund in place, you will have some cushion against any unpleasant exigencies. Avoid touching this fund until and unless there’s an actual emergency. And no, a rare Prada sale does not constitute an emergency! If your expenses are erratic, consider having an additional smaller fund in which you’ll put in excess money when you have it and withdraw from when there are additional expenses each month.

4. Thou must invest, invest, invest.

While there are plenty of savings instruments in which to park your money, if you truly want to give wings to your wealth, you need to harness the magical power of compounding. While traditional investment vehicles like recurring or fixed deposits will give you some returns and offer good capital protection, for long-term wealth building, consider equity investments such as mutual funds as there are few other avenues that will give you a windfall in the long term and protect against inflation.

Factor in your income, your risk appetite, inflation and your investment horizon when plotting out your investment strategy. Remember to regularly review your investment portfolio to adjust your investments in case of salary hikes. Also, diversify your portfolio to minimise risk and maximise returns.

5. Thou shalt be the boss of budgeting.

Budget-ise like a boss! The general rule of thumb is the 50-30-20 plan. This means you use 50% of your income for living expenses (including EMI repayments, bill payments, etc.), 30% towards discretionary expenses (such as leisure activities and other indulgences) and 20% towards savings and investments. This is only general guidance – this ratio will need to be tweaked depending on your life goals and priorities.

6. Thou shalt not ignore insurance.

People often tend to ignore insurance as there’s a general notion of being immortal and an unfounded belief that “That can’t possibly happen to me!”. Tsk, tsk. Do not buy insurance just for the sake of saving on some tax. Get life insurance to safeguard your dependents and even if you are single – some plans often have cover for disabilities and even for critical illnesses that may come in handy. Ensure that you have adequate health insurance to cover for health emergencies and do not depend solely on the medical insurance provided by your employer. Healthcare costs increase by almost 15% every year so you do not want to be in a situation where a health emergency wipes out your savings when you pay out of pocket.

Term life insurance is another good insurance product that will ensure that your dependents are financially looked after even if you’re not around. Buy insurance early because the younger you are, the lower your premiums will be.

7. Check thy Credit Score regularly.

Be cognisant of your Credit Score. Checking your score every month will ensure that you can quickly catch and fix any discrepancies in your score and, also, help you make informed and well-timed decisions about your credit needs. A good Credit Score will also give you more bargaining power with lenders so you will be able to grab better deals on loans and Credit Cards and save a substantial sum on interest.

Use apps and websites that offer free Credit Score services such as BankBazaar to get your credit report on a monthly basis. Automate your EMI repayments or Credit Card bill payments so that you never miss any payments, and your Credit Score remains in mint condition.

8. Thou shalt be an early bird.

Whether it’s buying insurance or investing in equity through mutual funds or saving for retirement, start early. In the case of insurance, the younger you are, the lower your premiums will be. So, get a good insurance plan with adequate cover while you are still young.

When it comes to mutual funds, the longer you stay invested, the more bountiful your returns. You can start with monthly SIPs of as little as Rs. 500 depending on your income. Then, keep stepping this up by 10% (or more) every year, aligning it with any hikes in your salary income, to reap a large corpus over your investment time period.

For e.g. say you invest Rs. 5,000 a month in the first year (i.e. Rs. 60,000), step this up by 10% to Rs. 66,000 in the second year, Rs. 72,600 in the third year and so on, at the end of 30 years, you will have a sizeable nest egg of Rs. 5.8 crore (assuming 15% CAGR). Reduce the investment period to 20 years and you’ll end up with a corpus of around Rs. 1.1 crore. Amazed? That’s the magic of time and compounding.

Additional Reading: 10 Credit Card Commandments You Ought To Follow

9. Thou shalt be mindful of spending.

As you move into the middle part of your career and your bank account is flush with funds, resist the temptation to splurge on unwanted things. Of course, enjoy the fruit of your hard work, but within reason. Do not end up in a debt spiral just because you failed to keep track of multiple avenues of spending – BNPL, Credit Cards, subscriptions services, etc. Stop falling for every targeted ad on Instagram – you’ll only end up with clutter and regret.

Even small amounts being siphoned out by way of automated payments on a monthly basis (e.g. your OTT subscription) can add up in the long term. Use apps like the BankBazaar app to keep track of your spending and aggregate bank accounts so you’re always cognisant of your financial situation.

10. Thou shalt know thy limitations.

Whether it’s your spending limit on Credit Cards or the extent of your financial prowess, know when to cut your losses. If financial planning, debt management and tax planning are beyond you, get some help. No, maybe not your know-it-all uncle, but rather a savvy certified financial advisor who is aligned with what you want and can help you manage your money better. When it comes to finding the right financial product for you, let BankBazaar do the heavy lifting for you – whether it’s a Personal Loan, Home Loan or Credit Card, we’re here to help you find the ideal product (with the additional convenience of free service and contactless, digital processes).

Ready to embark on your journey towards a financially secure future? Put the pedal to the metal by checking your Experian Credit Score and detailed analysis report for free.


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