Quite often, when we have credit cards in our wallet, we often tend to get into a spending spree. We do this in spite of being well aware of the high-interest rates on the outstanding amount after the billing cycle. Therefore, the best strategy here is first to pay your all unpaid credit card bills and use up your reward points. After this make a resolve to use it only in case of emergencies.
In this era of credit cards and easy loans, financial planning takes a back seat. However, financial intelligence is one thing that can provide you with happiness and peace of mind. Every time around with the start of the New Year, our New Year resolutions include a few on financial freedom as well. Do you know with a little bit of education and awareness, you can always attain your goals and straighten up your financial footing?
For you to achieve your goals this year and enjoy financial freedom, we give you a list of 10 things that you can do to improve your finances:
- Educate yourself
Do you know what the income tax slabs are for this assessment year? What are the different avenues where you can invest and save taxes? There can be numerous questions like these, and you need to know about all of these. You can take command of your financial position and reap the benefits.
- Start Saving
It is often said that one should start saving early. However, at any stage in life, you can resolve to start saving money. It is always the right time, and you are never late. Saving not only provides you access to funds in case of contingencies, but it also gives you distinct confidence financially.
- Have a budget and stick to it
Whether you spend all that you earn or more than you make, you already know it is a red signal. Shortly, you will face financial troubles. However, if you have a weekly or a monthly budget and stick to it, you are likely to spend within your limits and follow your set budget.
- Credit cards only for emergencies
Quite often, when we have credit cards in our wallet, we often tend to get into a spending spree. We do this in spite of being well aware of the high-interest rates on the outstanding amount after the billing cycle. Therefore, the best strategy here is first to pay your all unpaid credit card bills. After this make a resolve to use it only in case of emergencies.
- Get yourself insured
You need to have a sufficient insurance cover at all times. It includes your health insurance as well as life insurance plans. The amount that you should get insured for depends on your current age and income. In fact, in health insurance, it is always wiser to join a cover at an early stage of your career.
- Invest in multiple investment instruments
That is an age-old proverb that says “Never keep all your eggs in one basket”. It applies to your case as well. Your portfolio should include all promising investment instruments. Furthermore, the investment portfolio should be in sync with your risk profile.
- Avoid debt
Having a debt-free life has its advantages. Even if you have to opt for any loan, at least avoid car loan or personal loan to the maximum possible extent. A housing loan is encouraged as it helps you build an asset. Exercise the debt option only in case of emergencies. Never get lured by attractive offers in newspapers, magazines or emails.
- Set a few financial goals
Goals are necessary. These give you a purpose and a sense of direction. Financial goals are even more encouraging. It will drive you to save more and spend less. Having your own house, five years from now or a superbike in eight years, such goals provide you with a strong impetus to save today.
- Homework before any significant financial decision
Before taking any big step related to personal finance, it always wise to take time before you make the final decision. Read, consult and seek advice. Just do not get influenced by any marketing gimmick. In such instances, your choice should be free from any influence or prejudice.
- Do not pay heed to any financial tip
Earning money takes time and a lot of hard work. There can never be any scheme that will make you rich overnight or multiply your investments. Any financial or investment tip will always put you into trouble later.
To conclude, we may say that it is necessary to remain financially wise. Have financial discipline, follow a budget and have your own set of financial goals. No matter how consumerist are these times, but savings and financial planning are even more vital today. The key to a happy future lies in the present.