The new year has already begun, and we all are hopeful that our targets will be accomplished as per our wishes in the coming year. They could be about anything, both on the personal as well as professional front, but all we want is to see them achieved. Money matters are always a priority and the economic ups and downs that have been a set trend due to pandemic, make them all more important. Here are some pointers to clearly visualize how to smartly save and invest your money:
Make a plan-The first step towards achieving anything is to plan it well in advance. When you fail to plan, you plan to fail. Put your goals in front of you and formulate a stepwise plan to make them a reality. Also, there are a few benefits that you can lawfully claim from the employer. Tax laws also allow you a list of eligible benefits. Do not forget to claim them. That way you can lessen your burden.
Compare the new year’s agenda with the past year’s performance: Think about what went wrong and what worked out well for you in 2021. Accordingly make amends to your strategy. If some hurdles are manageable, try to face them if the result is in going to be in your favor. You can make an excel sheet to compare your month-to-month financial input-output performance. Keep a record of all your bank accounts, insurance, brokerage accounts handy. The important documents and records must be kept safe, but they should be traceable in case of an emergency. Closely watch your debts, credit card bills and exceptional expenditures.
Hire an advisor to carryout it all smoothly and efficiently: Money matters sometimes become messy and investing their own money becomes a challenge for many. In that case hire a professionally trained advisor who is knowledgeable and works independently to guide you. Qualified advisors will help you in diversifying the risk while building your portfolio yielding optimum results.
Trading apps and cryptocurrency: There are hundreds of new trading apps to guide investors. Make sure that the one you use is completely trustworthy and widely accepted. Do not take any risk by trying new apps. Similarly, Cryptocurrency is making a buzz these days. To learn about them is necessary. But do not blindly follow any sort of misguiding information even if you invest in crypto. Do not put all your money into it. Remember it is not regulated or monitored by any government agencies or banking institutions. When you decide to invest in cryptocurrency, the sole responsibility to tackle the outcome shall be yours alone.
Retirement, insurance and other important liabilities: At any cost do not take out the funds meant to be spared for your retirement. Except in case of some inevitable situation, you should not get prompted to do so. Insurance is another important part of money management. Health as well as life insurance are the most important parts of financial planning. Take care of your debts and try to bring them down whenever you have surplus funds. Loans and credit cards are the obligations which can affect your credit rating. Follow the repayment schedule strictly. Emergency funds and other exceptional funds to take care of your children’s education etc.also need to be part of the strategy.
Cut down your expenses and increase your savings: Spend on what’s important to you. Set your priorities. The unnecessary expenses can be put last on the list and maybe you can avoid them for another three to six months. Focus on your goals and divert your money towards achieving them. Usually, a part of your income gets saved. Calculate how much is saved by using a percentage. You can increase this percentage by reducing the current expenses or earning more. It is possible to avoid a few expenses and if your monthly income can be enhanced by investing in alternate profitable avenues, then you can do so, provided the risk factor is given due weightage.
React less to the market sentiments and imagine the impacts of gambling on your finances: To gain long term benefits, all you need to do is stay invested and do not get impulsive to take out your money when there are bullish trends in the market. Depending upon the goals, for short and long term, invest in a way so that you get the exact amount of money that you need at the right time. Your hard-earned money is not meant to earn short term or instant profits by reacting to the market sentiments. Investing money needs a well thought strategy.
Learn new skills, keep yourself updated and talk about your financial issues with someone who can help you: Invest a part of your money to learn a skill you always wanted to. Upgrade yourself by learning something new. This way you can not only add to your knowledge but become more compatible to challenges that might arise in your career/professional life. Financial issues that keep bothering you can be sorted out if you talk about them to a qualified person who does such jobs professionally. It is better to talk about it before it is too late.
The job and business scenario are changing everyday due to technological advancements. It is necessary to learn those which are applicable to you. Covid-19 has brought a lot of uncertainty when it comes to income generation. Many people have lost jobs across the globe and the others are forced to accept lesser pays. The value of money is perhaps the most crucial thing for survival in today’s world.
Smrutirekha Bhoi