Tarun Rustagi – How to Manage your Finances?

Vivek Law: Hello and welcome to this special series Finance Made Simple. Joining me today is Tarun Rustagi who is the Chief Financial Officer at Canara HSBC Life Insurance. Thanks very much, Tarun for joining in this conversation. Tarun what is the proper way to manage one's finances? There are various tools available to people, various theories, various advice - what according to you is the right way to manage your finances?

Tarun Rustagi: Managing finance will require you to probably invest in something and take some financial instrument. There are many instruments available on market. Managing finance means assessing what you need. First of all what is the requirement and how that requirement - it's preparing our cash flows for your future, next 20-25 years, if you're starting a career, and so on. Then you keep on adjusting that cash flows basis the situation. What you need to do is assess which instrument you want to buy and what you want to invest in. Now there are various instruments available. A mutual fund is a good instrument. Life insurance is a very powerful tool in the hand of any investor. Now why life insurance is unique and I feel that it has a unique feature is because along with the investment, you are also covering the risk. Managing finance is also having a very important aspect which is securing your family's financial future. If you don't do that, you will be creating a big risk for your family in case of any unforeseen event. And there, life insurance products play a very important role. There are various products available you have unit-linked insurance products, you have traditional products, saving products, endowment products. All these instruments inculcate a habit of saving. First thing, like SIP and mutual fund. Similarly, along with the mutual fund, you are also having risk coverage and then you can plan various stages at which you need money and that is pre-planned. Another advantage of life insurance, which I feel is a very important and very good tool for managing your finances is - you can keep on changing the Sum Assured, you can have a return of premium, you can have a waiver of premium, and so on. There are various options available with that. Apart from that, I think it's very important that you keep on investing in some money market instruments also so that some money is readily available to you. Always compare insurance products and another thing which you have to evaluate is the tax benefit you can avail by going to various instruments. Because that is so cash flow for you at the end of the tenure of that particular instrument. It also depends on your risk appetite. Some people are very ready to take the risk, they go for equities. Some people are risk-averse, they go for debt, etc. And fortunately, life insurance products cover all these two aspects through various products. All of us need to invest and investment can be in any instrument. I will not put any instrument on top of anyone. It's a user's or the person's choice and the requirement and their appetite, how they see it, how they perceive it. I think that's the way they should manage their finances.

Vivek: Alright, we leave it there. Thank you very much for joining us and sharing your very detailed perspective with our viewers. Thank you.

Tarun: Thanks, Vivek and thanks viewers.