8 Smart Tips for a Financially Sound 2018

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8 financial tips 2018

It’s time we start preparing answers to the inevitable question: “Hey, what’s your New Year resolution?”.  And apart from wanting to lose/gain weight, setting our financial goals straight is certainly going to feature in almost everyone’s objectives for 2018.

If you don’t know where to start, we are here to help you with 8 financial tips for a prosperous 2018.

Build an emergency fund

Life can take unexpected turns at any time, and we should be ready to deal with them without always seeking help from others or burying ourselves in debt. Having in place an emergency fund is probably our best bet to that end.

Generally, an emergency fund is equivalent to 3-6 months of your monthly expenses and must be liquid and easily accessible. So, putting aside money for your emergency fund in a savings account is a great idea.

Another point to note is that don’t confuse your property or your hefty fixed deposit as your emergency fund.

Read our blog for an explanation on how to go about building an emergency fund, as well as the advantages of having one.

Save, but without the counterproductive misconceptions

Do you neglect essential expenses like health checkups and car maintenance in order to ‘save money’? Do you feel you don’t earn enough to save? Well, it’s not uncommon to have these misconceptions about saving money, but you must make it a point to get rid of them.

Most of these common misconceptions actually have the potential to jeopardise the very savings we wanted to safeguard in the first place.

Read our blog where we discuss some of our common misconceptions about saving money and ways to mitigate them.

Plan for a comfortable retired life

Boredom, health woes, and financial stress shouldn’t be the reality in your post-retirement life. And only you can ensure you get to relax without these worries after working so hard for so many years.

Start planning for your retirement today, if you haven’t done so yet.

Although our country is considered as one of the best places to retire in the world, there are still many among us who don’t have specific plans in place for life beyond working hours.

But how to go about it? Having a clear retirement plan is a must-have, apart from saving early and smartly, and aiming to be completely debt-free by the time you retire are a couple tips we have for you.

We talk about how to plan for a comfortable retired life in more detail on our blog.

Don’t let your emotional biases influence your investment decisions

Have you ever taken an investment decision based on your ‘instinct’? Well, that might have worked for you and you might even have felt proud of it. Still, your ‘instincts’, which are mostly based out of emotional biases and assumptions, are no substitutes for plain financial facts and even common sense.

When it comes to investing, overconfidence, overwhelming fear of losses and going too far to ensure we don’t regret our decisions are some common behavioural biases that cloud our thinking. If not addressed, these biases can undermine our hard-earned money which we wish to grow through our investments.

This post identifies some of our common emotional biases that impact our investment decision-making and also suggests ways to overcome them.

Consider these points before investing in a fixed deposit

Well, for those who are considering going for a fixed deposit, have u actually analysed its pros and cons?

On one hand, fixed deposits are a low-risk investment option and fetch higher rate of interest than normal savings accounts.

On the other hand, you cannot withdraw any amount from your fixed deposit before the completion of the term. Also, there are some riskier investment options that give you better returns than fixed deposits.

Our post on the advantages and disadvantages of fixed deposits will help you take a clear decision.

Make the most out of your credit card rewards

Getting good rewards is one of the most sought-after perks of owning a credit card. And reward preferences differ from one consumer to another — some would rather want cash back or air miles, while others may choose extra discount for petrol refills.

But it’s very important to keep certain things in mind before zeroing in on a particular reward credit card.

For example, you need to know how much you’ll be spending each month, and then look for cards that give you the maximum rewards within that budget.

Similarly, it’s also crucial to check if there are conditions attached to those attractive rewards. Is there a high annual fee? How easily can you redeem your reward points?

This post examines many such questions about rewards which you must consider before deciding on a particular credit card.

Related: Air Miles 101: What You Need to Know About Using Credit Cards to Earn Miles

Drop your inhibitions over life insurance

Some of us may feel getting a life insurance is unnecessary, wasteful or expensive. However, it’s always advisable to go for a life insurance, especially when you’re young. Why?

Because the many advantages of a life insurance are hard to miss. From providing a support system to your family after you pass away to being a classic tax-saving tool, life insurance can provide a lot of financial relief.

Read our blog to find out why you should be considering life insurance.

Go on a financial diet to shed extra debt

Have you been accumulating debt like extra fat around your waist? Have you been binging on credit card ‘calories’? Well, your budget doctor prescribes you go on a financial diet right away!

The first step is to assess the calories you’re consuming, i.e. make a detailed list of your monthly expenditure and identify where you can cut down your expenses.

Then set a clear plan to save a particular portion of your income every month and stick to it. With regular savings and a firm control over unnecessary expenses, you’ll gradually raise a fund that could free you from debt and ensure you lead a financially healthy life.

Still not clear? Read our blog for numerous tips to improve your monetary fitness.

Hope these tips will help you in carving out practical goals to improve your finances. Have a superb 2018!

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