An Update to My Seven Money Resolutions for 2011:
#1 — Strengthen My Core Personal Finance Portfolio

by Vinaya HS on December 25, 2011

in Finance

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Towards the end of 2010, I made Seven Money Resolutions for 2011 that I hoped to execute upon through the year in order to strengthen my personal finances. A year has almost passed and I thought I’d provide an update on each of these resolutions.

Resolution #1:
I will strengthen the core portfolio of my personal finances.

I consider the following elements to be the core building-blocks of my personal finances:

  1. Emergency Fund,
  2. Health Insurance, and
  3. Zero-Debt.

A big emergency fund, adequate health insurance, and freedom from debt, are what let me sleep peacefully at night. I still recollect that night, about six years back, when I couldn’t sleep because I’d taken a loan from my employer for paying my credit card balance. I don’t want to experience that ever again. That said, here’s what my core portfolio looks like at present.

Current situation:

  • I have an emergency fund equal to 4-months worth of monthly living expenses. Three-fourths of this serves as my job-loss emergency fund and the remaining quarter serves as my general-purpose emergency fund.

  • I have individual health insurance policies plus work-provided health benefits for me and D from my employer.

  • I have cleared all my debt.

Much of this was done in 2010. From here, I’d like to move-up into the position outlined below.

Desired situation:

In 2011,

  • I’d like to first increase my emergency fund to cover 8-months worth of monthly living expenses. The 3/4 : 1/4 split between my job-loss emergency fund and general-purpose emergency fund would still continue. (Then, in 2012, I’d like to increase this further to cover 12-months worth of monthly living expenses.) I define 1-month’s worth of living expenses as the amount of money that I believe to be adequate for my family to lead a decent lifestyle for 1-month.

Update: Though there were quite a number of unforeseen emergencies that required me to dip into my emergency fund, I will end the year with 8-months’ worth of monthly living expenses.

  • I will continue our present health insurance cover. Additionally, I will look for individual health insurance policies to cover D’s parents (they’re covered right now through D’s work benefits).

Update: I renewed our individual Star Health Medi Classic policies. I purchased Star Health’s Senior Citizen Red Carpet Insurance for D’s dad. Yet to successfully convince D’s mom! She acknowledges the need for health insurance but is adamant about not undergoing medical tests. She’s not 60 yet, so we’ll need to wait a while before buying Red Carpet Insurance for her as well.

  • I will continue to remain out of debt.

Update: No headaches here. I’ll continue to end the year with no liabilities.

If I manage to do all these, then by end-2011, my core personal finances will be twice as solid as they are today.

Update: I think I have a pretty solid foundation now. 2011 turned out to be a good year.

Over to you now. How strong is your core personal finance portfolio?

Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 5 comments… read them below or add one }

Nikhil Shah December 25, 2011 at 11:29 PM

I like your idea.

Now coming to Item No.(1) : Emergency Fund , I am investing Rs.20,000/- Per month in Liquid Fund (2). Currently my Health Insurance cover is Rs.5,00,000/- for my self & Rs.5,00,000/- for my Wife.(3). I am Totally DEBT Free. (4). Since 2001 , My Monthly Investment SIP is Rs.25,000/- and still continue.(5) Currently My Life Insurance cover is Rs.50 Lachs , Now i am planning to increase to Rs.75 Lachs..(6). For my Retirement Planning , I continue investing Templtion India Pension Fund – Since 1997 and still continue..

Nikhil Shah

Vinaya HS December 26, 2011 at 6:00 AM



How far away are you from financial freedom? Unless you already are…

Rakesh December 26, 2011 at 10:55 PM

I am good too on the personal finance portfolio.
I can survive on my emergency funds for the next 5 years without job.
Plan is to make it 7 by the end of 2012.


Vinaya H S December 27, 2011 at 5:24 AM


Wow, again!

Is your emergency fund also a part of your overall investment portfolio? Or do you keep these distinct? My question is more on the lines of “Do you have One BIG Portfolio that you dip into for whatever goal’s coming up next?”

Rakesh December 27, 2011 at 10:42 PM


My emergency fund is not part of my investment portfolio. These are mainly money lying in savings, FD and debt funds wherin i can cash in 2-3 days if i need the money. For my investment portfolio i have MF & Stocks.


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