The month of September heralds the beginning of autumn when nature changes its hues and start shedding old leaves. Consider it symbolic for your financial life; it’s time to shed beliefs that don’t serve you and prepare for a new beginning.
So, what are the 5 good things or habits that you can start this September for your financial well-being? Perhaps, you can also start a new investment plan. Read on to find out.
Start a Systematic Investment Plan (SIP)
It may almost sound cliché but that is the best financial advice that you can get. Some people think that a SIP is a financial product in itself, but that’s incorrect. A systematic investment plan is just what it says it is: a systematic plan that allows you to invest in mutual funds on a weekly, monthly and quarterly basis. There are also fortnightly and bi-monthly plans available.
Using the power of compounding and spreading your risk in instalments, you get the opportunity to invest in equity mutual funds and enjoy good returns and higher fund value with SIPs. Experts recommend investing in SIPs during a volatile market as the turbulence helps investors benefit from rupee cost averaging. It basically means that you end up buying more fund units when costs come down and less when they rise. The fluctuation, therefore, helps investors.
Start the snowball method to get off debts
If you have played with snowballs or even watched snowballs falling down a slope in a movie or video, you’ll understand what the snowball method means. As the snowball gains momentum in its downward journey, it gets bigger and bigger with time. But first, it starts with a small snowball.
Using the same theory, focus on dealing with small ticket debts such as credit cards and personal loans. Credit card and personal loans are expensive credits that you need to get rid of as soon as possible. Also, stop relying on credit cards for your day-to-day expenses.
Start investing in ULIPs
Unit linked insurance plans offer you twin benefits of life coverage and investment for wealth creation while giving you maximum tax benefits. Some ULIP plans such as Bajaj Allianz Life Goal Assure available on Finserv MARKETS has been consistently providing returns of around 25% over a 5-year period.
With the flexibility to easily switch funds, life coverage, tax benefits, and higher returns, ULIPs are ideal investment plans to tide through volatility and help you create a substantial corpus in the long term.
Stop buying on impulse
Did you notice something different here? Yes, this is not a start but a stop. You have to stop the bad first to start the good. And buying on impulse is a bad thing for your finances. Remember how often you have gone to the departmental store just to buy cheese and biscuits but ended up spending Rs. 1,000 when you left the store. Or, you visited a fashion store just to accompany your friend and ended up buying a Rs. 5,000 dress that was billed on your credit card.
That’s impulse buying and that’s dangerous for your financial health. Stick to the list and control your spending. Don’t buy things that you don’t need just because they are available at a good discount.
Start a term insurance plan
If you don’t have term life insurance, don’t delay. Buy it today to secure your family against the unpredictability of life. It’s advisable to buy a group term life insurance that provides insurance coverage for the entire family.
For instance, Group Term Life Insurance offers life insurance coverage of up to Rs. 1 Crore to you, without having to undergo any medical check-up. It also offers you a critical illness rider, thereby securing your family members and offering you peace of mind.
Apart from making good investment decisions, cultivating financial discipline and having the correct mindset is crucial to achieving financial success in life. You should create financial goals and make disciplined savings and investments to reach that goal. If it’s difficult for you to visualize what you want in the next 5-10 years, just chalk out a sum of money and give your best to reach that amount within a specified time frame. No amount of good investments or even a windfall can guarantee financial well-being if there’s no financial discipline and goals to motivate you.
Most of the problems in personal finance arise because people don’t give much importance to financial education. Read, study and research to succeed.
Also read in detail about the ULIP tax benefits you can avail with a Bajaj Allianz ULIP Plan available on Finserv MARKETS.
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