Diwali is one of the most awaited festivals in India. This is one festival, which keeps all of us busy with making arrangements, buying crackers, sweets, and gifts for everyone. Not everyone is aware that this festival also brings to us, the 6 most important Financial Planning Lessons of life. Financial Health Calculator-Click Here
Let’s see what they are!
1. Safety First
All of us enjoy fireworks and we also take all the needed measures to keep ourselves and our families safe. The same planning has to be implemented with respect to one’s financial health.
Also, when we burst crackers we take utmost care and children always burst them under adult’s supervision. Likewise, one also has to take the advice of a financial advisor before making any investment in schemes. There are a number of schemes that look attractive but they turn out to be a disaster in the long run.
The same also applies to trading as well. Never follow anyone when they ask you to invest in a particular stock. Do your own research before investing in any stock. This is similar to how we trust ourselves when it comes to choosing and burning firecrackers.
2. Advanced Planning
People plan for the festival of Diwali well in advance. Everyone plans for the kind of gifts they need to give their family and friends, the sweets to make, the kinds of crackers to burn, shopping for clothing, house renovations and so on. Similarly, one needs to plan and invest early to reap better benefits. By early investments, one can also generate good returns with compounding. So, we not only need to plan early for Diwali but we also need to plan for our investments.
One also needs to be extra cautious when investing and it is important to have a very detailed financial plan, planned well in advance before making a safe and lucrative investment. Always choose an expert financial advisor.
3. Have a Goal When Investing
Gifts for family and friends during Diwali are bought as per their taste, age and preferences. Likewise one has to have different goals of Financial Planning at various stages of life. One needs to have a goal when investing and these help you sail through some difficult situations without disturbing your regular cash flow.
4. Get Rewarded with Variety
We all choose various varieties of crackers for Diwali and similarly one also needs to properly diversify the investments in one’s portfolio. By this, investors will reap the benefits that are offered by different financial institutions. A well-balanced financial portfolio will provide you joy and benefit at the same time.
Also, crackers are classified into hazardous and non-hazardous categories and we give the less risky ones to the kids. Likewise when investing, we need to choose the schemes that are less risky or more risky by considering various other factors.
5. Prepare For Emergency
Whenever there are a lot of firecrackers to be burnt, fire extinguishers are kept handy to avoid any accidents that might occur. When planning any investment, one also needs to have a back-up by choosing the right insurance policy as it helps to deal with any uncertainties that might come up. Being prepared with an insurance cover will be of help when unplanned losses occur.
Also, we never purchase crackers from unknown brands and similarly one should never invest in any unpopular scheme. Just understand the risk before you invest in any scheme.
6. Clean up your portfolio on a timely basis
Like people clean their houses and offices before Diwali and give away the things that are no longer needed, investors also need to follow a similar approach with their investments. Check the investment portfolio thoroughly to make sure that it has all for your financial goals and for any unseen and unplanned expenses. One also needs to exit from the schemes that are not performing well.
The festival of Diwali teaches us all many money management lessons. Apart from those mentioned above, this festival also has a lot to teach us when it comes to financial planning. So, this is the time to plan your finances well and to have a sparklingly safe and financially planned Diwali.