Financial planning makes an important aspect of an individual’s life. Financial planning ensures that your finances are well planned and that you have enough savings and investments to ensure financial protection in times of trouble as well as sufficient growth of your money. In today’s world, money has become a necessity so deep that just amassing it is not enough, ensuring that your money grows is also an essential step of financial planning.
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| Top 10 Financial Tips |
Here are a few tips that can make you save as well as grow your money so that you are financially covered at almost all points of time in your life.
- Differentiate between wants and needs
There can be a thousand different things that you might want to buy but only a handful of things that you actually require. Avoiding to splurge unnecessarily on things that are not essential is one of the foremost rules of financial planning.
- Set aside a little emergency cash each month
While huge savings isn't a matter of minutes, setting aside a small amount every month will ensure that little by little you are able to build a sufficient corpus for times of emergency or urgent financial need.
- Form a basic monthly budget and try sticking to it
Budgets are the best way to plan your spends. Overspending is an issue with almost all individuals and as such sticking to a basic monthly budget proves to be a beneficial strategy for better financial planning. Monthly budget can also help you realize your essential versus non-essential expenditure.
- Drop excessive use of credit cards
While credit cards offer great financial flexibility, overuse might result in inflated credit card bills which may eat into your monthly budget and destabilize it. So, restrained use of credit cards is the best policy.
- Get a retirement plan in place
Think about your current lifestyle and how you want it to be during your older years and then based on these inputs, avail a retirement plan that would take care of days when you will no longer be earning.
- Diversify your investment portfolio
Investing in just one or two types of financial instruments is not the best way to plan finances. Diversify your portfolio in order to hedge the risk associated with bad performing financial instruments.
- Maintain a good credit history
Pay your credit card and other utility bills on time. Ensure all EMI payments are timely made so that your credit history is good and maintained that way. This will enable you to avail credit in times of urgent or sudden financial need.
- Maximize benefits offered by employer
Take full advantage of all employee perks that your employer offers. This goes a long way in cutting down personal expenses and enhancing savings.
- Check your insurance plans
Avail insurance plans but check that they do not have clauses that you are paying for without actually needing them anytime in the present or future. For example, going for life insurance policies makes sense only when you have dependents and not otherwise.
- Invest some amount from your income
While saving is an extremely essential part of financial planning, investment too is very important. Considering the current global trends and inflation rate, just saving isn't enough since you also need to ensure growth of your money which can only be achieved via investment. Avail an investment tool that you are most comfortable with based on your risk appetite.
With the above few tips in mind, your financial planning will not only be sorted but will also yield returns that you will be happy to achieve.
