Diwali is the biggest festival celebrated in India and this festival brings us various lessons about financial planning which can be implemented in day-to-day life. While many of us plan well ahead of time for Diwali, there are various things that we need to take care to ensure best financial planning for the coming festive season
Most of us work for long hours so that we can make ends meet but we fail to take out the time needed to manage the personal finances. We not only need to earn but we also need to take the time needed to manage the hard-earned money and create that change in our mindset. Diwali is the best time to bring ahead that change and to take care of the financial well being of your family.
Let us now have a look at some of the tips that can help you with financial planning this Diwali !!
1. Start by improving your financial knowledge
Most of us suffer from low returns on our investments, debt traps, being under insured and having insufficient funds for retirement and so on. One of the major causes of such issues is the fact that we were never taught about managing personal finance. You need to have the right knowledge about managing your finance and this is the first step that you will be taking for the financial well being of your family.
2. Create a savings plan for every financial goal
Planning is important in every aspect of life. This is quite essential when it comes to money. One can set their financial goals based on the three kinds, the short, medium and the long-term goals. Such planning will certainly help in your financial well being.
3. Have proper budgeting
People can gain control over unwanted expenses by proper budgeting. By knowing how much you are earning and what is being spent, it gets easy to control finances. Budgeting will also help people to identify the area of high expense and will also help you to evaluate on how unnecessary expenses can be curtailed.
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4. Reduce the burden of loans
One also needs to review the existing loans on timely basis to make sure that we only have loans that will help in increasing our net worth in the future. One example for such loans is educational loan. Bad debts are to be paid immediately. A proper evaluation of debts will help us save on the interest.
5. Plan your taxes
Most of us get into a last minute tax planning at the end of the year. You need to do your tax planning by considering your needs, goals and the risk appetite you have. People can talk to financial experts and take help for choosing the best ELSS funds for Tax Planning this Diwali.
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6. Take Insurance cover
Insurance is a must now days and is the most crucial thing to remember while financial planning. Most of us do take the insurance cover but it is not adequate. While buying the life insurance policy do consider the important factors like living expenses of the present and future and how much does your family need in case a tragedy occurs. Accidental insurance and property insurance too are to be the part of everyone’s insurance portfolio.
7. Always have an emergency fund
While many of us do plan for the same, not all of us implement it. Our life is full of uncertainty and hence it is necessary to have an emergency fund. This not only helps us with the financial need during emergencies but also saves us from the stress that arises due to financial crisis.
8. Write Your Will
If you haven’t yet created the will, this is the right time to do so. Most of us do not write a will as we think that we do have such assets and also that we have placed a nomination already. Though nomination is a great help, but it is also advised that one needs to make a will to avoid any family feuds and complications in future.
The above-mentioned strategies will certainly help anyone in preserving their wealth, not only for one Diwali, but for many more to come.