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7 Simple ways to strengthen your finances

  • Highlights

  • Strengthening finances by securing your family’s future

  • Fall-back option in adversities with financial planning

  • Debt management & financial planning for sound future

Taking measures to improve your finances is the first step to securing your and your family’s future. For example, investing in varied options such as fixed deposits, equity and PPF gives you substantial returns. It also allows you to build a reserve that you can use in case of an emergency.

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Conversely, poor financial planning hinders retirement plans and leaves you with insufficient funds when you need a back-up plan the most.

Here are 7 tactics that you can implement to strengthen your finances.

1. Create a budget and abide by it:

Budgets help you check your expenses and give you an overview of your financial habits. Set limits for expenditure, categorise your expenses and focus on building a savings plan. Not only does this give you a better sense of direction when it comes to your money, it also helps you prioritise your needs better.

2. Save first and spend later:

When you receive your salary, make it a point to save a significant sum before going ahead and spending it. This way, you can assure that a portion of your salary is always secure, regardless of your expenses for the month. You can divert these savings to a recurring savings account or a fixed deposit, for example. Doing this will help you save money while multiplying it.

Additional Read: Best Schemes For Saving Your Money

3. Maintain emergency cash reserves:

It is essential that you save some money as a cash reserve for emergencies. You can do this by opening a savings account that keeps your money safe while giving you instant access to it. It balances savings with liquidity, therefore making it ideal for unforeseen monetary needs.

4. Borrow debts cautiously:

It is easy to take on debt in the form of credit cards or personal loans. But, you must implement precautionary measures before borrowing. This is because debt comes with the responsibility of repayment with interest. Borrowing too much over a period of time, with limited finance, is sure to make repayment difficult.

In extreme cases, this can make you insolvent. Apart from this, excess debt will affect your credit score. Hence it is important to exercise caution when it comes to taking on debt. You can consider debt consolidation by opting for a personal loan at a lower rate of interest.

5. Invest correctly:

Investing is the key to building a financially-secure future. But, before you invest, it is important to review all the features of the investment plan and go ahead only if it matches your risk appetite and your financial needs. Unplanned or ad-hoc investments won’t give you the results you are looking for, and may result in money down the drain.

Additional Read: 7 Mistakes That Throw Your Investments Off Track

6. Create a will:

It is important to create a will to ensure that in the event of your death, your family is taken care of. Take the time to assign a legal custodian to your financial assets so all your efforts don’t go waste.

7. Read up on financial matters:

When you can, read up on finance. This will help you understand the market and guide you on steps you can take to improve your investment habits. Financial experts are always authoring articles and books, and reading them is an excellent way to get tips and tricks that you can put in place in your own life. It broadens your horizons and gives you a better perspective on how to handle personal finances.

Everything you should know about Fixed Deposit

These strategies can help you manage your finances. Whether your goal is planning for a comfortable old age or an early retirement, these tips will hold you in good stead.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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