Every new year we make promises to ourselves; to make the upcoming year different from the last, better than the last. We make changes to our lifestyle to improve our overall well-being. Well, a new financial year should be no different. So, as 2018-19 sets in, it’s time to give your finances a face-lift. Ask yourself – How much do you want to grow this year? What are your goals and how do you intend to achieve them? Can you answer these questions if you don’t have a proper financial plan in place?
Indians are said to be amongst the best savers in the world. According to an investor survey by DSP BlackRock, the financial sentiment among Indians is 84 percent, the most positive of all markets surveyed (global: 56 percent). In the same survey, over 80 percent Indians responded that they take financial planning seriously and it gives them mental peace.
Today you might be earning a decent amount, but if you don’t know where you are going with your money, your resources may deplete sooner than you think; and when an emergency strikes, you may be left defenceless. Financial planning can prepare you to a great extent, provided it is done with careful consideration. It is important to understand that you can’t blindly follow others; for individuals live in different circumstances, have different spending habits, and lead separate lives.
Budgeting requires you to know and understand your financial goals – both short-term and long-term. Short-term goals can be something like buying a car or going on a vacation. Buying a flat in a metropolitan city or saving up for your child’s education would fall into the category of long-term goals.
Once you’ve determined what your goals are, you need to invest funds to realise them. Do your research on investment options, and as soon as you find one that suits your needs, invest whatever you can. The more you invest, the better your returns will be. It is imperative that you periodically evaluate your investment strategy because your needs will change with time, and so will your financial condition. You have to take it all into account in order to come up with a plan that suits you best.
Every goal requires a different saving pattern. If you’re a beginner, you should ideally look for a low-risk investment with high returns. A Fixed Deposit or Recurring Deposit, can help you in this regard, and they are quite easy to book with HDFC Bank through NetBanking. What’s better is that you can earn a substantially higher interest on these accounts as compared to a savings account. A Fixed or Recurring Deposit can be the first step toward realising your long-term goals.
On the other hand, for short-term goals, you can consider investing in mutual funds. Simply open an HDFC Bank Investment Services Account, and you can purchase, redeem and switch Mutual Funds* online through NetBanking.
It is also crucial to consider contingencies. You should always have a security blanket in case of future illness or mishap. The one way you can achieve this is through life and health insurance plans. Despite being recommended by most financial experts, people tend to ignore such plans because they are unaware of the benefits. Adding a term life insurance to your financial plan, can give you peace of mind knowing your loved ones will have a financial safety net, in case something happens to you. Similarly, a health insurance plan can provide you with the necessary finances to deal with unexpected costs arising from emergency medical conditions, thus saving you the trouble of dipping into your savings. Learn more about different kinds of life insurance plans here.
So, instead of waiting till next February or March to plan your finances, start the process right from this very moment. And don’t aim to only save your taxes,** make plans to achieve all your short and long term financial goals. After all, what you do today, can determine your tomorrow.
*Mutual funds are subject to market risks, read all scheme related documents carefully.
**Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.