We all have financial dreams such as having a house of our own, purchasing a new car, or going for a foreign trip, etc. for which money is the most important requirement. Sometimes for a person, his/her salary may not be sufficient enough to help the person achieve those dreams and thus managing one’s money becomes even more important in order to ensure that those long-term financial goals are achieved.
If you wish to see your long-term goals get fulfilled, then you can take some decisions regarding the management of your money so that you can take a step closer to achieving your dreams. We will look at some of the smart decisions you can take in the year 2019 in order to organise your financial life in a better manner.
- Involve your family when making financial decisions: It is important that you do involve your family when taking any sort of financial decisions. There are various advantages why you must make sure that your family members take an active part in helping you take financial decisions. First, it helps you make better decisions as there are more people involved who would provide their own inputs. Secondly, the younger members of your family such as your children also understand the importance of money and why it is a must to save money.
- Start saving keeping in mind your budget: You need to keep a monthly budget as it would not only allow you to save but also instill in you a sense of financial discipline. One of the simplest ways to do this is to keep a tab on the expenses and the amount of money you will be required to save. Once you follow this process for a minimum of 3-4 months, you will have a very good idea of how much money you will be required to save on a monthly basis and the expenses that you will incur. Once you have a clear idea of your expenses and savings, you can start by investing your saved money in low-risk instruments such as fixed deposits which provide returns at 4% or above, and other instruments depending on your needs. In short, once you have set a budget, you can save and ensure that they your money is never kept idle and is invested so that it keeps on growing over a course of time.
- Invest as per your goals: You may have goals which might be not only long term in nature but also medium term and short term in nature. Thus, it becomes important that you do not invest in just any investment tool and instead make your investment-related decisions depending on the types of goals you have. Blindly investing in any investment tool can jeopardise your finance and come back to haunt you later. Hence, always pour your money in tools keeping in mind not only your long-term goals but also your medium-term goals and short-term goals.
- Saving taxes: If you have just started working, saving taxes might be the last thing on your mind since the chances are high that you may not be earning so much. However, it is also the perfect time for you to start learning about the ways you can save taxes. For example, you get tax exemptions of up to Rs.1.5 lakh under Section 80C of the Income Tax Act, 1961 if you purchase a life insurance policy or invest in tools like Public Provident Fund (PPF), Employee Provident Fund (EPF), etc. You must educate yourself on how you can save taxes which will also help you make better investment decisions in the future. As your income grows high enough for you to invest, you must invest in instruments that are suitable for you without delaying.
- Be clear about where to invest: When you decide that you can invest, you must not pour your money in any instrument. It is important that you make your investment decisions based on your financial income, future goals, and the financial liabilities that you will have to clear. It is also important to evaluate your future needs and the responsibilities that you will have to shoulder in the forthcoming years. Once you are clear, you must also research the various avenues in which you can invest and based on the suitability, you can invest your money.
- Purchase an insurance policy: You must ensure that you have purchased a suitable life insurance policy as you can never be sure about what would happen to your loved ones from a financial point of view if something happens to you. It is important to understand that you simply do not purchase any insurance policy and buy one only after you have evaluated your insurance needs. There are various insurance products that you will come across and you must compare the plans you like and purchase the policy that you believe will be suitable for you.
- Make a will: You must make a will so that there are no disputes between your family members when you are gone, and everyone is clear regarding the wealth they will be possessing as per your choice. You must also appoint a nominee or a beneficiary if at all the need arises.
Hence, these are some of the things that you can do in order to ensure that the year 2019 turns out to be a good year for you from a financial point of view. You must be clear about your goals and based on your future needs, you should take your financial decisions.