“Financial planning isn’t all about good advice or returns on your investment. It’s about providing advice you can trust. “
It is always beneficial to plan and prepare a plan for your future finances. You certainly don’t want to make the same financial mistake you made earlier. It is also important to plan your investments well.
The 2018 budget was recently announced and although there is no change in personal income tax, long term capital gains will be taxed at 10% for amounts exceeding Rs. 1 Lakh, without indexation.
So how do you plan for 2018 to make it financially viable?
To make your 2018 fiscal year a great HIT, here are 10 financial steps you can take:
1.) Venture into a term plan or insurance
Life has its own course. You can never be aware of what is going to happen next. It’s unpredictable, so it’s important that you plan ahead.
Invest in a term plan as a way to secure your family’s future. The term plan or term insurance is financial protection that helps your family financially while you are away. Term insurance is increasingly popular because it offers many benefits.
2.) Have health insurance
Health is wealth and there is no denying this fact.
Whether you have family or lead an independent life, investing in a health plan should be your top priority. Accidents and illnesses are not uncommon, and the sad part is that medical treatment is not cheap in our country.
Having health insurance helps you overcome sudden medical emergencies.
3.) Invest in a systematic investment plan (SIP)
It is one of the easiest and most convenient ways to invest money in mutual funds. You have the freedom to risk your money every week, every month or every quarter. Systematic investment plans give you an already decided amount to pay evenly on regular terms. This type of investment in mutual funds is considered to be the safest and most suitable type in the market.
4.) Buy real estate
After the implementation of the Goods and Services Tax (GST) in 2017, real estate investors were not very sure about their financial security. However, the situation is likely to change in 2018. It appears that the government is looking for new ways to jumpstart growth in the real estate sector.
With the Real Estate Regulatory Authority (RERA) law in place, there is no room for false promises from real estate developers. You also probably won’t have to deal with cheating or being late in possessions. Plus, rates are low across the country. Due to good market conditions, this may be a good time to buy a home or commercial property. But be sure to take advantage of the benefits of a home loan while making this expensive transaction. Instead of paying the full cost in cash, use a home loan to pay a portion of the full cost and save on taxes. What better time to invest in real estate than now?
5.) Fixed evergreen deposits
This is a financial mechanism provided by banks where investors receive a high interest rate varying from 4 to 6.5% compared to normal savings. Here your money is deposited in a fixed deposit account for a certain period without and you cannot withdraw it until it expires. Maturities can vary from one week to 7 years depending on the investor. And since your money is locked in, you have no choice but to save. The loan on your fixed deposit is available, which you can opt for in an emergency.
6.) Investments to save taxes
Balance your portfolio well and keep an eye out for tax saving instruments, while investing in the year 2018. You are entitled to a tax deduction of up to Rs. 1.5 lakh under the Section 80 (C) of the Income Tax Act. Make sure you use it with care.
In the case of traditional debt tax saving instruments, yields have become lower in recent months. Invest in options like ELSS to maximize your return on investment.
PPF is another option that you have. Although the interest rate has recently come down, your money is safe here.
In addition to that, use Personal loan for expenses like the education of the child, home renovation. This will help you claim a tax benefit under section 80 (C).
7.) Invest in balanced and liquid funds
Mutual funds and liquid funds offer moderate returns, are tax efficient, and will protect your hard-earned money. The percentage of them that should make up your portfolio is completely up to you.
8.) Have a good budget in place
It is crucial to have an appropriate budget in place and stick to it.
Did you have a budget for 2017? If not, then it’s time to get one. And if you already have one, make sure it doesn’t have the same flaws as the previous one.
Every person should have a budget regardless of how much money they earn. Keeping a constructive budget helps you keep track of your spending. It will also help you keep tabs on your savings and plan your finances well.
9.) Estimate your monthly expenses
Keep track of your monthly expenses to know where your money is being spent. Spend time analyzing your expenses and reduce unnecessary expenses. This will help you build up your savings in the future.
10.) Maintain a good credit rating
An acceptable credit score helps you gain greater acquisition capacity which will help you achieve your dreams of buying a home or financing your child’s education. Always keep an eye on your credit score.