Top 4 Financial Planning Tips to Grow Your Wealth
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The challenge to manage bills, expenses and savings are real. When we want to start investing or saving, there is a plethora of information available—online, from our family and friends, and the occasional financial advisor. How to decide what works in growing your wealth? Here are some of the most effective tips to help you plan your finances and grow your wealth.
Invest in a systematic investment plan (SIP)
SIPs have been around for a while now and are a smart avenue for professionals looking to amplify their wealth. One can easily set aside an amount to invest in a monthly SIP of their choice. The process, which earlier involved agents who charged a commission for advisory and operational services, has also been made easier with the launch of new-age financial apps. Once you’ve downloaded an app, you just need to fill in some basic details and start with investing as little as INR 500 a month. It is also advisable to put around 5% of your monthly income in top equity funds that ensure better long-term returns.
Amplify tax savings
Since a significant percentage of the Indian population falls in the low-income category, the awareness about tax-saving instruments within the country is not very high. However, it is important for working professionals to invest in equity-based tax savings options such as PPF, EPF, and ELSS. Opting for these saving instruments can provide tax breaks of up to INR 1.5 lakh under Section 80C for salaried individuals. Buying a term insurance plan or a comprehensive health insurance plan is also a smart way of saving tax while keeping yourself and your family insured against health-related emergencies.
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Opt for new-age financing alternatives
India is home to more than 48 million credit card users. However, credit card interest rates tend to be on the higher end. When in need of some extra cash, opt for other digital finance alternatives such as a credit line that provides much better access to flexible borrowing. Opting for a credit line from new-age fintech companies can help you avail instant disbursals with minimal documentation. The transaction is also 100% digital and requires no collateral or guarantor. The best part about such credit options is that you borrow small amounts of money as per you need and pay interest only on the amount that you utilize, instead of the total amount approved for borrowing.
Gain Financial Knowledge
While you will always have financial experts to assist in your money-related decisions, it is important to conduct your own research and to double-check facts. For instance, before you invest in any SIP, you must begin by gathering all the knowledge about the company whose shares you are planning to buy. It also pays to be aware of the general market conditions at the time of making the investment—and to set clear expectations about what you want from that particular financial decision.
Invest In yourself: Investing in undertaking a higher education degree or upskilling with an industry certification—this will help you move ahead in your career, thus increasing your income potential and opportunities for greater wealth creation.
Following the abovementioned pointers can act as great financial instruments for anyone who is planning to turn money into wealth. It is advisable to start making sound financial decisions from an early age, gain financial knowledge and eventually watch your investments create wealth for you.