Reduce debt

Avoid taking expensive loans like personal loans and leaving a credit card outstanding. The interest rates on these are exorbitant. In fact, credit card interest can be as high as 40 per cent annually. If possible try and take less expensive loans like gold loans and repay credit card outstandings.

Invest in retirement plans

Look at some retirement plans. It is important to place money in some schemes like the Public Provident Fund (PPF). We strongly recommend PPF for three reasons.

There is tax benefit on them under Sec 80 C of Rs 1.5 lakhs. The interest on the scheme is tax free and lastly it has a lock-in of 15 years, which helps to save.

Avoid heavy exposure to shares

While you must invest in shares, it is best you avoid heavy exposure. As you get older you should reduce exposure to shares and increase exposure to debt.

Take a critical helath insurance policy

Take a critical insurance policy that covers cancer, renal failure liver diseases and other sickness, which can be a drain on resources.

At a premium of around Rs 5000 you can get yourself covered for as much as Rs 10 lakhs.

Cut down on your useless expense

It is also important to cut down on your useless expenses. You must understand that it is important to save.

Cut down on your useless expense

Keep separate amounts for your child's education. This would avoid lumpsum requirement at a later stage.

Seek financial advise

You should seek financial advise, if you do not understand investing. this will avoid pitfalls at a later stage.