![]() But, thorough research is imperative while purchasing health/medical and life/term insurances. And opting for insurance at a younger age will give you benefits such as lower premium charges. Having health/medical, term and/or life insurance is prudent and it helps secure yourself and your family in times of uncertainty. You don’t need to dip into your savings, and they are also great tax savers! Your out-of-pocket expenses shall be restricted. Not only does insurance protect you from unforeseen risks, but could help you in the long run, provided there is adequate coverage, by covering your medical/health costs. The importance of health and term insurance policies can’t be stressed enough. Always do your research and never solely rely on others’ advice as capital markets are associated with risks. Don’t wait until too long to invest, but never invest out of the fear of missing out. ![]() One of the most important things to remember while investing is not to be swayed by the fear of missing out. Hence, building a risk appetite in line with our goals is critical. But that said, risk is inevitable in market-linked financial programmes. Slow and steady wins the race for a reason. ![]() Neither chase after high returns in the short-term. Options such as fixed deposits, recurring deposits, provident funds, national pension scheme and others are other traditional yet safe bets for those with a lesser risk appetite.ĭon’t underestimate the power of compounding returns. Look at low-risk mutual funds and keep long-term in mind always. Start small and then you can work towards having a diverse portfolio of various financial instruments once you get a hang of it. Hence, it gives you the flexibility and convenience to invest the amount of your choice. It is like a recurring deposit, but market-linked. SIP has become popular for investing regularly in mutual funds. Try convenient and smart tools like Systematic Investment Plans (SIPs). Start off with small but smart investments. You need not necessarily be ‘The Big Bull’ or ‘The Big Bear’ in the capital markets to start investing. It is never too early or too late to start investing. Remember: A penny saved is a penny earned. And if you have reached your savings target, give incremental savings a shot. If you can save more, do so by all means. ![]() You can arrive at your own rule of thumb after taking into account your income and financial goals. However, it is important to know that there is no one-size-fits-all. A systematic approach for budgeting often suggested by financial experts is the 50-30-20 rule of thumb.Īccording to it, an individual should allot 50% of the income to essential expenses or “needs” (living, food, and other expenses), 20% towards personal expenditure or “wants” (luxuries and leisure) and 20% towards savings or financial goals such as investments. A plan for savings should begin at the budgeting stage itself. But saving for a rainy day is essential as a solid savings base would give you a cushion to handle uncertainties in a better way. Considering that there has been a massive shift to digital spending in India in recent years, expense management apps can come in handy for those struggling to get a sense of their spending habits. Since the apps would have a record of all your transactions, it will help you review your expense profile better and help prioritize your spending. In case it gets tedious to keep a tab of all your expenditure, expense management apps can come to your rescue. So, take a look at your income and expenses from a broader perspective to identify what can be cut down and then narrow down your focus to optimizing your spending. Sometimes, looking at things from a vantage point helps in understanding them better. Know where your expenditure is going and how much. Track Your ExpensesĪ good first step in financial planning is to start tracking your expenses. Here are some habits one could cultivate to accomplish your goals in 2022. So, if there is a good time to start working towards our personal financial goals and inculcate some financial discipline, it is now. Scientific research indicates that it takes about an average of 66 days for a behaviour to become a part of your lifestyle/routine, in other words, a habit. That shouldn’t deter one from cultivating necessary habits and instead be all the more reason to start working towards them. Working towards financial stability is a process and two days of work won’t make us any richer than yesterday. And if the last two years have taught the world something, it is the importance of financial security and the need to be prepared for life and its uncertainties. Things may or may not have panned out the way one wanted last year, but reflecting on the year gone by and having a new outlook is the key to a better future. A new year means new beginnings, new possibilities, new opportunities and new experiences.
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