Smart Moves for the New Financial Year
the start of a financial year is a crucial period for making new decisions, investing, and setting new goals. formulating new plans, reassessing the market, and taking care of your finances are all paramount if you want to have a productive financial year.
here are a few smart moves you can make to ensure a great year and avoid financial insecurity.
several unpredictable situations such as financial exigencies, illness, death, economic crises, or even a wrong business decision can cause your downfall. such financial emergencies can force you to default on your loans and equated monthly instalments (emis), render you unable to fulfil your essential expenses such as utility bills and rent, and make your life uncertain and insecure.
an emergency fund is a must to safeguard yourself from such situations. a good rule of thumb is that your emergency fund should be able to fulfil your financial needs for six months: this includes daily expenses, loan payments, rent payments, emi payments and other financial obligations.
a well-formulated financial plan helps you figure out what your next business and money move should be. this will then help you achieve your financial and business goals according to your risk appetite, investment portfolio and cash flow.
before making a financial plan, you will first need to calculate the amount of money required to achieve your financial goals and how much time you want to invest them. doing so will give you enough information to formulate an asset allocation strategy that can meet your financial goals.
starting a systematic investment plan (sip) is a great way to invest money periodically. through this, you can invest a predetermined amount periodically. the amount to be invested in a sip is deducted automatically from your savings account on a predetermined date at every interval. this ensures financial discipline and regular investments. you can calculate your sip projections using cred's sip calculator.
if you don't have a credit score, start by availing a credit card. transactions on credit cards are considered equivalent to availing loans; that's why credit card transactions are reported to credit bureaus.
getting covered through various forms of insurance will aid you through unforeseen circumstances. life insurance, health insurance, medical insurance, travel insurance are some types of insurance that provide you with support in the face of uncertainty.
financial planning is essential for your security. if you follow these steps, you will have a great financial year. you can use tools like the cred ppf calculator and sip calculator to plan your investments.