[sniplet SMR-2011-Update]

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?