The Indian festival of Makar Sankranti is among the most fun festivals; a time to gather with our family, enjoy delicious festive treats, and participate in kite flying competitions. It reminds us about the joys of family life and how we always wish for our family’s happiness and security. One way to ensure their security is through prudent financial practices. This Makar Sankranti, take these necessary measures to make your finances fly high like your kite.
Here are some sound financial practices to enhance your finances.
Savvy investors often adopt the 50-30-20 rule for managing their finances: allocating 50% of their income to essentials, 30% to discretionary spending, and saving the remaining 20%. However, these ratios are flexible. While maintaining your necessary expenses, consider reducing your leisure spending to 20% and increasing your savings to 30%. This small adjustment can significantly accelerate your journey towards achieving your financial goals.
The cardinal rule to make your finances fly high like your kite is to ensure you don’t put all your eggs in one basket. You must consider the risks and rewards and diversify your investments into instruments offering a fixed cash flow and variable returns. You can adjust the ratio of your equity-to-debt investments based on your risk profiles. Also, consider short, medium and long-term Investments to cover all your bases.
Setting specific goals gives you a sense of purpose and direction. Break down your bigger goals into smaller achievable goals. For instance, if you wish to send your child abroad for education, determine an amount to add to their college fund each year and ensure you achieve that goal while increasing the annual savings. This same rule applies to creating a down-payment corpus for a house, a small business, etc.
Staying current is key to boosting your finances. Explore beyond conventional equity and debt instruments by considering high-yield alternative investments. For example, investing in Real Estate Investment Trusts (REITs) lets you earn dividends without the hassle of buying, managing, or financing properties. Consult your investment advisor or financial planner for more information on alternative investment opportunities to enhance your portfolio.
Now that you know how to scale up your finances, you can take steps in that direction. The first step towards financial freedom begins with opening a bank account. HDFC Bank offers Savings Accounts, Fixed Deposits and Recurring Deposits, among other products and services, to help you achieve your financial goals. So, give your family the gift of financial freedom this Makar Sankranti – start investing today.
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* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any/refrain from any action. Investments are subject to changes in tax laws. Contact a professional consultant for an exact calculation of your liabilities.