Good Financial Advice for Bad Times

SYSTEMATIC AND SMART INVESTING NOT ONLY ENSURES YOUR MONEY WORKS FOR YOU BUT ALSO KEEPS YOU SOLVENT DURING HARD TIMES.

Identify your goals

The first step to financial planning is to determine your objectives: Be realistic about where you are now, what you want to save for, how much each of your goals will cost and what steps you need to take to realise these goals.

Educate yourself

Keep yourself updated about key financial concepts and the types of investment options available as each type works in a different way. For example, equities offer potential for both growth and income, while bonds would provide stability and income and insurance provides a life cover.

It’s Ok to ask for help

If you find financial jargon baffling then you should seek out a financial advisor who can help you understand money better and chalk out a suitable investment plan.

Stick to a money plan

Be religious about making systematic monthly investments. This allows you to invest regularly, smoothen out market volatility and benefit from the power of compounding to build up a sizeable corpus with a certain number of years. Boost your contributions in small, steady increments and time the stepups to your annual increments and bonus.

Start young

Single women in their twenties have the ability to take on higher risk and can allocate a bigger portion of funds into equity and equity related investments. Moreover, the younger you are when you start saving, the less you’ll need to invest given the power of compounding.

Save tax

Include tax- saving strategies in your overall financial plan. Many of us put our money in savings accounts or fixed deposits without realising that these investments yield low post tax returns. Even if you invest in cash, liquid or fixed maturity plans, you could end up earning better post tax returns than if you used common saving instruments.

Make independent decisions

Non- working married women in particular have a tendency to be dependant on their husbands when it comes to making financial decisions. However, investing is not that difficult and can be started with small amounts of money saved and invested on a regular basis.

Prepare for emergencies

An important aspect of financial forecasting is planning for accidents or critical illness. People rarely plan for emergencies as they think such events only happen to other people. Signing up for long term insurance or a critical illness cover goes a long way towards providing financial support to families during the worst of times.

Plan ahead

Successful financial planning not only means investing regularly but also knowing how to analyse your investments every few years as goals need to be re- prioritised with changing lifestyles and age. Instead of looking at the end goal, take stock of how far you have come and what changes you need to make in the days ahead.