We have recently entered in 2018. You must have planned lot of thing for your personal finance. In order to help you here are 18 Financial tips for 2018. I am sure these financial tips will help you to sparkle your financial life.
18 Financial Tips for 2018
- Start Investment at very young age. It will help you to generate lot of wealth due to power of compounding. Select a mutual fund over a Fixed deposit and other fixed return investment instruments. Try to save at least 15–25 % of your earnings.
- Do not let this sentence scare you. “Mutual fund investment are subject to market risk. Please read the offer documents carefully before investing”. Most people avoid investing in mutual funds just because of this one warning. Yes, there is a market risk, but look at the history and growth of mutual funds.
- Avoid property as an investment instrument. If you are buying property on loan, select Home Loan carefully. Loans eat away most of your earning unless you have a clear plan for its repayment. It’s important to monitor cash flow. Though, the house will be your asset, your liability will be much more.
- You should keep some investment as liquid. As per me, 20% of your wealth should be liquid so that you can utilize the same in the emergency.
- Don’t keep huge money in the saving bank account. Considering inflation, you are actually losing money if it is in savings bank account. Invest your money as much as possible.
- Avoid stock market investment on tips. If you invest in stocks, pay due attention. Do fundamental research and study before making an investment.
- If you invest in stocks have a separate account for delivery investment and Intraday trading. It is for easy monitoring and tax calculation.
- Never invest in insurance for returns. Insurance is not an investment option. It is a risk management tool. Never mix investment with risk management.
- Do not have a belief that property and car make you rich. It’s what you save and invest, that is important.
- Never use credit cards for lavish spending. Use credit cards intelligently and for needs not for wants. Make sure to carryout study before opting for credit card.
- Cancel all credit cards before you die. Inform family members about all your accounts, credit cards, loans and saving now itself. Even a small residue will cost your family much.
- Invest on yourself and then on other investments. Uplifting skill is very important in today’s world. Learn something that has demand as per current market.
- Pay yourself First. Adopt this rule. Try to balance your earnings with your savings first, then on spending and loans. Never take unnecessary loans.
- Plan for emergency fund. Always have a plan for future events on your career, life, spending and finance. Always have a reserve on your savings for contingency and urgent situations.
- Purchase suitable health insurance plan. Also secure your family members with health insurance. Health insurance gives dual benefit. You can have health cover and tax saving also.
- Your personal life and health are the most important investment. Do have a regular health check and do healthy workout every day. Stay healthy and live happily.
- Please secure yourself with adequate term Insurance if you have dependents. Opt for online term plan that will help you to save more money.
- Prepare a Will. It may avoid unnecessary fights after you die.
I hope above financial tips will help you in managing your personal finance.