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When we talk about Personal Finance; what is your Mission 2020?

Personal finance

At first, Happy New year 2020!

New year celebrations are over and we have moved back to our routine! Many must have set ‘Resolutions’ for this new year, like joining a Gym, learning a new skill set, Spending more time with family etc etc.

When we make resolutions ,we are suppose to stick to it and continue putting the efforts for it to progress. But.. it may not always happen! Its funny, but more footfall in gyms is recorded between January to march due to new comers, but what happens in rest of the year?

Well, when we make something as our “mission” , we tend to stick to it and achieve it with serious efforts.So, here is your mission 2020!

To do list of 20 ; to start and practice in this year 2020 and make it a mission for you!

  1. Start Investing: Yes , its important! If you are tracking the market, or just want to enjoy your earning more in shopping etc, its high time. You should start your investments NOW to reap more benefits. Dont delay it for any reasons.

2. Make your Personal Financial Plan: Planning gives us a road map to achieve our realistic goals. When you do it with the help of an expert, you get to learn and understand many things related to personal finance and they help you to structure your finances well in manner.

3Plan your taxes well in advance: Those who are employed will soon start getting mails from HR about tax declarations. Please dont rush for your tax saving investments after seeing this mail, do it in advance. Equity linked savings scheme, EPF, PPF , Time deposits etc are the eligible investments under 80C. There are many new provisions in last budget which you can consider while declaring your taxes.

4File your income tax returns on time: Its better to file your income tax returns well in advance before the due date. Last minute rush is risky because, you may miss out on some investments and other important details.

5Split your FD investment amount: Due to recent experiences of bank crisis, its advised to have your FD investments in 2-3 accounts . You should select a big bank which is backed up by government. Avois investing in small cooperative banks, Patapedhis etc.just to earn some extra interest rate.

6Plan your shopping well: We are bombarded with many discount festivals online and offline. A single visit to mall, makes us spend money on many unwanted items. This adds up to monthly expenses and a Gives a miss on the budget.

So , plan your shopping. Don’t fall pray to any discount mania, buy only if its required.

7Start adapting digital transactions: World is going digital in every sphere. You should not left behind. Specially , people in their 50s find it difficult to transact online for their routine bank transactions. So, start following investments, banking etc in digital manner, teach elders in your family about it too. But please follow safe practices. Protect your login IDs, PIN and Passwords.

8. Infuse Equity in portfolio: If you are still following traditional way and means of investing, then please include ‘Equity’ into your portfolio. Its not only for those who have more money can invest in equity, you can too start a ‘Systematic Investment Plan’ monthly for your long term goals and make the most out of it. Read and understand more about equity and start investing in it.

9. Make Nominations: Nomination is very important in your investment portfolio, for your assets and insurance policies. Please check if you have missed out on it, and make nominations in every investment, Insurance, bank account and assets which you posses.

10. Start reading at least one newspaper about finance: We all read newspapers daily. Now, its easy to read it on mobile Apps. So, this year, start reading one finance newspaper either through paper or download App for it. Here, you will read and understand more about economy and finance in focused manner. This will help you to become an informed investor.

11. Educate or aware atleast one person about personal finance and investments:Yes, you can create awareness about personal finance, investment and insurance among your family friends or colleagues. You can talk about any recent development in market, or share what you recently read about any particular investment or insurance. Though you may not give any expert opinion but they can get something new to hear and talk about.

12. Create a contingency fund: Anyone can face contingencies in life. In this world of private sector jobs, start ups, everyone should be well equipped to face any financial contingency which may arise from a job loss, pay cut or loss in business.

For this you need to create a ‘Contingency fund’. This can be equivalent to six months of your monthly expenses. If your job is in very volatile sector, please create a corpus equivalent to 8-9 months so that your household will not be affected due to any job loss or pay cut. You can choose ‘liquid funds’ for this purpose.

13. Take your personal Health insurance: Though your employer has provided you with a nice health insurance cover for you and family, please don’t rely on it. You must have your separate health insurance policy. Reasons being, as you grow older, it becomes difficult to get a policy even if you have a high blood pressure etc. Though you get, you get it on a high premium and waiting period is also long.

Another important reason is, in this era of frequent job changes, when you change your job, your existing mediclaim cover can cease during notice period as per your employer’s policy and in next job , till you get permanent, you don’t get any medi claim benefit. This long period, you and your family should not be without any health insurance cover.

Even if you stick to your same job till retirement, in your 60s it will be difficult to get any health insurance for you and family and in these days, due to high medical costs, its difficult to survive without medi claim as life expectancy is long.

So, think on it and apply for your ‘family floater plan’ .

14. Buy your dream home: Real estate has been everyone’s favorite because the returns it has generated in past. But, due to many changes in rules, regulations and laws, its has become relative better , to buy your dream home.

Home loans have become cheaper , slowly banks will link them to external benchmark rate which is in your favor, additional tax benefit of Rs 1.5 lakh has been announced under ‘Pradhan Mantri Awas Yojana’ which is beneficial for middle income groups. So, look for a better deal and book your dream home.

15. Increase your SIP amount with your salary increment: Salary increment must be enjoyed but you should also increase your SIP investment along with it. Every addition of your regular income should carry along regular investments. This will curb your unnecessary expenditure and also make you to reach your goal faster.

16. Look for passive source of Income: You must look for additional source of income. You may learn a new skill set or can get income from your hobbies. But, it always better to diversify your income sources.

17. Get yourself a ‘Term Insurance’: To make your dependents financially independent after you, please take a term insurance. People often mix insurance and Investment and look for returns. But that is not life insurance is for.

‘Term Insurance’ is the life insurance which serves the pure insurance and fulfills the purpose to take life insurance policy.

You can buy it easily online directly from the insurance provider.

18. Start talking about personal finance and investments: Generally, people avoid ‘Money discussions’. They find it odd to discuss their income, investments and strategies. Though, you should not disclose details about it, you still can initiate discussions. This will help every one of you to learn from others mistakes and gain from their experiences.

19Invest in gold wisely: Gold is shining brighter these days. Gold is everyone’s favorite and with this rise in prices, it is attracting everyone attention.

But, while investing, please set your long term goals, understand long term returns that gold has generated in the past and then invest in it. This time , go for E-form of gold like Gold ETF, sovereign gold bond etc. When you purchase gold for your daughter’s wedding or to gift your daughter in law or just for a consumption as jewelry , you can go for such means of gold investments. Its easy to invest, where you can track your investment even daily, and no need to look for its safety as you invest in demat mode.

20Review your portfolio regularly: You must review your portfolio, regularly. even if its giving good returns, do that regularly. Here, you will get to know about the returns,performance and will help to stick to your asset allocation.

This way, include “Personal Finance” as an important aspect of your life along with your health and hobbies. Get on a mission, to make your finances bright and healthy for you!

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