With the cost of living reaching new heights every year, meaningful expenses, necessary saving, and smart investing is the way to manage your finances. Fixed income is not increasing at the same rate and that is why putting your money where it can grow is important. The path you choose to take to make this happen is known as financial planning and the tools you wield are known as management.
Top Financial Planning and Management Tips for Women in 2022
When you have resources at your disposal it is best to invest them in ways that will elevate your quality of life and those around you. Let us take a look at some ways you can do this.
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1) Rebalance your portfolio
There are many avenues for investment and the reward and risk are inversely proportional. The perfect way to ensure you don’t end up losing your investment and getting a good return on investment is to diversify your portfolio. Consider a healthy mix of mutual funds, PPF, stocks, and even cryptocurrency if you are interested. Stagnant wealth will make you lose out on opportunities to earn and consequently result in heavy losses.
2) Plan for a big expense every year
Making a financial plan at the beginning of the financial year is a smart way to ensure you have time to attain your goals. If you are planning a big expense in the upcoming year like buying a house, then you can align your investments accordingly. At such times it is important to choose an option that allows you to liquidate your assets quickly without losing out on any of the profits.
3) Health insurance policy
Investing in your health and a good future is important. A blessing for you and your family, a health insurance policy is the perfect way to ensure you are not only preventing a dent in your savings in the future but also saving money by adding to the policy and saving tax as well. According to section 80D, the tax benefit is on the premium paid towards the health insurance policy. Health insurance covers you in case of critical illnesses, surgery, hospitalization, and other such life-altering situations. It covers the costs of road ambulance charges, ICU room rent, complimentary health checkups, and in addition to these, you can purchase add-ons to make your policy more suited to your needs.
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4) Manage Debt
If you have a loan that you are paying off, an expert tells you a very simple trick to reduce the tenure of your loan in years. Every year if you pay an extra installment, then in a matter of 12 years, you are reducing a year on the duration. Depending on your credit score, you can get a bank loan and keep paying it off. The rate of interest can be high and that is why it is important to balance the duration which affects the rate of interest. Managing this while ensuring you still have enough to keep a roof over your head and a little extra for emergencies. Don’t get too caught up in paying off your debt immediately and forget to save a little for any unforeseen circumstances.
5) Buy Two-wheeler Insurance
If you have a vehicle, you are required to have third-party insurance according to the government. The primary focus of two-wheeler insurance is to ensure you are not burdened with financial liabilities in case of an accident that damages your two-wheeler and the other party’s two-wheeler or property. Two-wheeler insurance allows you to protect the driver and the pillion rider and ensures the charges incurred due to accidental injury are covered under this insurance policy. You can protect your two-wheeler using insurance against accidents, theft, fire, natural disasters, personal accidents, and third-party losses.
6) Reevaluate savings per month – If you are making a certain amount, you need to evaluate how much you are spending on the things you need and how much of it you end up saving. Saving doesn’t necessarily mean putting it in a savings bank account. It can mean reinvesting or adding to a fund that is set aside for retirement or the college of your children.
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7) Assess investment opportunities – There are ample opportunities to keep shuffling your funds. Government schemes, ELSS, PPF, increasing your PF, and so on. Now and then it is important to look around to spot any investment opportunity that you may have missed. See the rate of return on investment and decide for yourself.
8) Set financial goals for yourself – Having financial goals gives you an idea of where you want to reach. Once that is clear you can then look for ways to achieve that goal. You can make a 5-year plan or a 10-year plan. Break them up into 1-year goals or smaller fragments to make your journey easier. It also gives you a sense of achievement when you achieve smaller milestones.
Financial planning is not difficult and neither is managing your funds. There is no one way to do it. They largely depend on people’s priorities and what people want from their life.
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