Diwali! The festival of lights is just one day away. The festival has many interpretations, of which to drive the darkness of ignorance out of our lives is the most significant one. However, there is one more important significance of Diwali which is related to our financial life. This is to push ourselves towards a more prosperous life and get rid of the financial hurdles in your life. But, to achieve this, you need concrete financial planning.
Why Financial planning?
Financial planning is the most basic and building block for wealth management. Having a proper plan and working according to it makes you so disciplined and organized that you reach your goal easily.
So, let’s start planning our finances to gain prosperity in your lives this year.
Financial planning tips to make Diwali 2020 a festival of future prosperity!
Commonly, most people stick to safe investments which in return yield them low returns.
But only investing your money in such profiles will not help you much to build a secure future. Hence, it’s important to diversify your investment portfolio to gain better returns. For this start investing in assets like stocks, equity mutual funds.
Another benefit of having a diversified investment portfolio is – it reduces risk and protects your investment if any asset underperforms.
Invest your monthly saving
Saving money is the first step towards creating wealth but it’s also true that only saving money cannot give you better returns. The money you saved needs to be invested in an appropriate portfolio to generate wealth for you.
To achieve your financial goals, now the investment has to be your second objective. You should define your financial goals, the investment amount, tenure, and then select the right investment tool for it. It sounds tough but trusts us it’s not a difficult task.
Investing in the right mutual fund as per the investment tenure of your goal doing SIP can help you, this is suggested because in SIP you can invest monthly and the investment can be started even with a low amount of ₹500. So, with SIP you can invest a portion of money which you save monthly.
But, for wealth building, it’s important to diversify your investment portfolio and invest in multiple schemes.
Having a tax-efficient portfolio
If you keep on investing without thinking about the tax it can result in paying more taxes at the end of the year-end. To avoid this it’s important to select tax-efficient investments, this will increase your return gain and will reduce your tax charges at the same time.
So, don’t just focus on safety and liquidity, but also look for tax-free investment portfolios.
For example – NSC, Senior citizens savings scheme, and the 5-year tax-saving fixed deposit offer the Section 80C tax deduction up to Rs 1.5 Lakhs a year. There are many more, but you need to select one as per your requirement and preference.
Say no to impulsive big-ticket purchases
What we discussed above was all about investment. But one of the important things which most of us don’t give attention to during these festivals is – the big-ticket purchases!
Yes, that’s true, among all the significance of Diwali, purchasing ornaments, golds, or some big-ticket gadgets are also common. Making these purchases costs so much and can disturb our financial planning.
You may get things on great discounts, both at nearby stores or on shopping portals, during the festive season but that doesn’t mean you should push your spending capacity in making big-ticket purchases. With Instant loans, personal loans, shopping discounts, and a festive mood, anyone can slip away and indulge in a shopping spree. However, you should avoid getting into such big-ticket purchases if your pocket is not allowing you to do so.
However, before you start investing or planning for Diwali, it’s important to first analyse yourself, your finances/income, and then plans for the Diwali expenditures and investments. Analyse and calculate investing how much can give you the desirable/required returns. Diwali has lots of significance among which gaining financial prosperity is one.
Hope this article will shed some light on how you can brighten your finances this Diwali.