Hello Readers!
Every family or individual is different, their needs and goals are different, and so different should be their financial planning. Financial experts advise, when you prepare your financial chart, look at your needs, expenses, and goals, instead of looking at others.
Don’t invest in equity assets just because your friend is, make sure you have the capacity to manage the high risk in equity mutual fund and remain invested for a long period.
However, there are some money goals that might be the same for many families or individuals. This Corona Crisis has made us realize how important it is to keep your immunity strong, at the same time it has also explained the importance of strong financial immunity.
To build strong financial immunity we all must incorporate these three standard practices in our money management.
SAVE MORE THAN YOU SPEND
Whenever we receive our salary, we first look towards the expenditures to be carried, but it is ideally advised, first put your savings away from your reach and then carry your expenses with the leftover.
During this lockdown, we were at home, if you have noticed you must have noted that you were spending too much on things that were not needed. This unnecessary expenditure of today is putting our future in danger.
Thus, you need to make some changes to your spending habits. Practice first to save from what you get and then spend what you have left with. Also, save more than you would spend on non-essential items like entertainment, shopping, and eating out. Create a balance between saving and spending, and if possible, tilt more towards saving.
CLEAR OFF THAT EXTRA DEBT
Many are fond of shopping for new clothes, a bike, a car, and many things. These people are also more attracted to taking a loan or using their credit card to buy these things. Using a credit card or taking a loan is not a problem, till you are habituated of repaying your debt interest on time, along with managing your expenses. But if you miss your repayment on time, it can create a burden of debt on you.
Now that you are at home, with few outlets to spend, use your salary wisely to repay your debt, that you don’t need to carry forward. Remember, not only can too much debt make us overspend beyond what we can afford but also the interest payments come back to bite.
SAVING? NO INVEST FOR YOUR FUTURE NEEDS
Like others, you must also have large spends in the future like your retirement, your child’s education, their marriage, and many. For your this big-spending, saving is not enough, you should rather start investing your money to cater to these goals.
The current crisis has proved that the worst-case scenario that we had never imagined can come true. At this time many companies are losing their revenue; they are bleeding cash. Many business owners are facing a tough time, it is becoming difficult for them to be loyal to the business versus personal expenditure.
At this time an investment instrument that allows you to withdraw from growth assets, an amount earmarked for a specific goal much in advance and move it to a stable investment, can be useful to invest your money. I would rather suggest start investing in Large-cap Equity Mutual Funds for your big spending in the future.
Last but not the least, it is never too early to start planning for your finances. Thus start preparing your finances today to deal with the next crisis whenever it may come.
For any kind of investment query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).