Basics of Personal Financial Management

I am not a financial consultant, but I think there are some fundamental things that all of us (earning folks) have to take care of, especially while doing financial planning. I am sure lot of people are already aware of this/doing this now. But still, there may be few folks who don't know anything about savings or investments. That's the reason why I'm sharing this:
1. Life Insurance - risk coverage for one's dependents. It is recommended to go for term life (something like pay ~ 15K premium per year for around 20 lakhs cover).
2. Medical Insurance - important if you don't have your employer providing the same for medical emergencies to cover yourself and your dependents.
3. Fixed asset like property (less liquid, meaning you will not be able to sell and get back the money immediately when you want): If one can afford to buy land or a house or an apartment, it is one of the best means of investments because we never know the kind of expenses that we would have, say 10 to 20 years from now. Fixed assets like real estate will have capital appreciation which will generate higher returns in the long run. If there is a housing loan and insurance cover for that loan, it is even better.
4. Liquid asset (mutual funds > stocks > options > commodities, etc, in the order of complexity): tax savings is the first objective here and mutual funds are recommended than NSC (from Post Office) or insurance ULIPs, especially for salaried folks. This asset will be liquid because you can withdraw money whenever you want (except tax savings funds which will have a lock-in period of 3 years). If you do SIP (Systematic Investment Plan) in a mutual fund, after sometime (say 1 or 2 years), if u need urgent money, you can always withdraw from this corpus. But we will have to keep a close tab on the performance of the fund. In choosing a fund, 2 factors have to be taken into consideration: fund should be time tested and have proven track-record. One can also think of fixed deposits, for safer returns (but moderate) - 2 years, 3 years, since the interest rates are high today. You can opt for this only if you REALLY need the money at the end of the tenure, and can't wait for more time (like in mutual funds, where exit criterion will be based on pefroamance and market conditions).
For basics of mutual funds, visit:
http://www.amfiindia.com/showhtml.asp?page=mfconcept
http://www.reliancemutual.com/KnowledgeCentre/Content.aspx?ReportID=8f6378af-065a-4bf6-aef3-76d3d2641e80
5. Liquid Cash: bank account balance....to take care of daily expenses (and for expenses which cannot be met using a credit card!)
6. Other assets: all the above will be for self....then you need to think of family needs...car, planning for children's education, jewellery, etc.
7. Emergency fund: in order to meet contingencies, it is also advisable to keep additional cash (one can even use an additional credit card - to swipe it and repay back the money if you dont have immediately!).
8. You can think of one more emergency fund for family needs and for buying gifts, planning vacations, shopping:)

Remember:
- There will be no pension for people working in private organisations when they retire
- Cost of living is going to be higher than today
- We cannot afford to depend upon others at a later stage in life :)

How many of us have been thinking on these lines? To be frank, I have just started:).