With an influx of choices, technology, and the menace of increasing financial fraud, it is becoming increasingly confusing for people to decide upon policies, methods, and organizations to choose when it comes to their financial capital.
Here are some ways to navigate this rather challenging path.
- Clear financial goals:
No navigation begins without a goal, you need one to guide you on the direction to go to. So, setting crystal clear financial goals is the beginning of your effective saving and investment journey.
- A detailed budget:
Completing the intricate task of setting up a budget smoothes your financial journey.Your budget considers your income/salary, expenditure patterns, EMIs, luxury costs, and savings. Identifying these helps you track where you’re wrong and helps you cut back costs.
- Emergency Fund:
Emergency fund is a capital you set aside for medical emergencies, property loss because of natural calamity, or job loss. Emergency fund includes at least 6 months of savings.
- Self-Learning:
Take initiative to educate yourself on personal finance, investing, and retirement planning. Check books, journals and magazines on finance and investment; attend seminars, follow financial experts to stay updated with the latest trends and regulations in the financial industry.
- Free yourself from ‘High Interest Debts’:
Free yourself by beginning to first pay off ‘high-interest’ debts. Doing that will enable you to redirect your money towards small investments.
- Do not delay investment:
Start off early to invest in the right schemes. The earlier you begin, more will be the compounding interest you will receive.
- Diversification:
Diversify your investment by investing in bonds, stocks, or real estate, small equities and even SIPs.
- Consider SIPs:
Even though small, SIPs reduce the risk that market volatility comes with. SIPs are a safer investment option for beginners.
- Understand Risk Appetite:
Stable methods are fixed investment instruments for those who do not have a risk appetite because they wish to receive regular interests over a time, while those schemes with quick returns like equity are less stable and may bring more losses.
- Early Retirement Planning:
Start early retirement planning. Understand schemes like (PPF – Public Provident Fund), (EPF – Employee Provident Fund), (NPS – National Pension Scheme).
- Learn about Tax Saving Options:
Equity Linked Savings Scheme, and tax saving fixed deposits are the few methods to save from taxes.
- Regular Review:
You need to review your portfolio regularly and check whether it aligns with your financial goals. Keep rechecking your financial goals. The review will help you stay on track and keep your journey smooth. It might as well help you operate with your wavering risk appetite as your income increases.
- Professional Advice IF needed:
If you feel, you might as well seek guidance from a finance professional. The market has ‘financial advisors’ who grant advices on where to invest, where to save from.
- Keep Checking up on Government Schemes:
Keep yourself updated on any government schemes and policies on investment, taxation and pensions.
- Be patient:
It is a long journey with a lot of hits-and-trials, risks and choices. Your financial journey will demand patience.
All the best for your journey ahead..!