Provide for Emergency
So before you invest your surplus money, it is important that you first create a cushion for unexpected circumstances. The three most important components of providing for emergencies are:
- Having a medical insurance for the entire family
- Have adequate life insurance cover for earning members of the familly
- Having at-least 3 to 6 months of expense as an emergency fund
Besides this, it would also be advisable to evaluate the need for taking insurance for important assets like house, valuables, office and goods (if you are having your own business) etc.
