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| Capitalstars Investment Advisor |
New year, that is something that a considerable lot of us have guaranteed ourselves toward the beginning of consistently. I'll deal with my wellbeing; I'll shed pounds; I'll eat less low-quality nourishment; I'll invest more energy with family - are only a portion of the goals individuals make. Being increasingly judicious with cash is additionally a goal that individuals make.
Close inactive bank accounts
If there are bank account/s not being used by you and just lying dormant, close these. By not doing so, you might be penalized. Also remember, if the only transaction in an account is the periodic credit of interest on the existing balance, such accounts will be treated as dormant.
Safeguard your banking transactions
Do not opt for saving of password option prompted by the browser while accessing Internet banking. Beware of malicious sites and apps while accessing Net banking or downloading Net banking apps.
Don't keep all your money in just one bank account
If there's one thing that the unfortunate episode of PMC Bank has taught us, it's that you should not put all your money into one bank account. Urban co-operative banks especially are not well-regulated. Definitely don't fall prey to the higher returns offered. Also, each bank account has its deposits insured up to Rs 1 lakh under the DICGC. So you'll be able to make full use of this option when you spread deposits across banks.
Stick to the 50/30/20 rule of financial planning
According to this to this thumb rule, 50 percent of the earnings after tax should be used towards necessities, 30 percent of the money should be spent on luxuries or wants / desires and 20 percent money should be saved and invested towards your financial goals. This thumb rule supplemented with a solid financial plan can take your finances places and make your financial journey smooth.
Keep your credit profile clean
It's not just your credit score but your overall credit profile matters too when looking for loans. Don't rely heavily on your credit cards for borrowing, these are in fact the most expensive form of debt. Exhausting your credit limit regularly will hit your profile too. Make sure that your utilization never exceeds 40 percent of total the credit limit available.
The more, the merrier
It is actually a myth that too many credit cards just complicate your finances. Get credit cards from 3-4 different issuers so that you are eligible for all the discounts being offered by various merchant outlets.
Avoid using a credit card to withdraw cash
Lenders charge a cash advance fee of up to 3.5 percent on the number of your ATM withdrawals. Plus, these also attract interest charges right from the day of the transaction till the date of its repayment. You do not get any credit-free period to make interest free repayments of the same.
Do not fall prey to festive season sale tactics
No cost EMIs, cashback, first-time user discounts, there are so many festive or now even non-festive offers throughout the year. Make it a point to set aside a certain amount for your discretionary expenses for the year and stick to that. Go only by your needs and don't be blinded by discounts.
Diversify but don't over-diversify
Investors think that the way to achieve diversification is to invest in many mutual fund schemes. However, the truth is that no additional diversification is provided by investing in more funds beyond a point. Remember, stocks held by similar funds tend to be a similar set and will be similarly impacted by market movements.
Personalize, plan and prepare
Make your financial plan according to your goals, risk appetite, and horizon. Do not go by hearsay. Do your research about investment avenues, market movements thoroughly. Consulting a financial planner is a great idea. Finally, keep aside enough corpus for emergencies. There might be unforeseen events along your journey. Wealth managers normally advocate that the size of the emergency fund should be about six months of a family's monthly expenses.
Set this goals and enjoy your life without any tension.