Financial planning is about more than just good advice or
investment returns. It is about providing guidance that you can trust.
It is always beneficial to plan out and have a blueprint of
your future finances ready. You certainly don't want to make a same financial
blunder that you have made earlier. It's also important to plan your
investments well.
The Budget 2018 was announced recently and while there is no
change in personal income tax, long-term capital gains will be taxed at 10% for
amount exceeding Rs. 1 Lakh, without indexing.
So, how should you plan 2018 to make it financially viable?
1.) Venture on a Term's Plan or Insurance
Life has its own course of running. You can never be aware
of what is going to happen next. It is unpredictable and therefore it's
important that you plan ahead.
Invest on a Term Plan, as a way to secure your family's
future. Term plan or Term Insurance is a financial protection that helps your
family financially in your absence. Term insurances are increasingly becoming
popular as they come with loads of benefits.
2.) Have a Health Insurance
Health is wealth and there is no denying that fact. Whether you've family or you're living an independent life,
it must be your priority to invest on a health plan. Accidents and ailments
aren't uncommon, and the sad part is that medical treatment isn't cheap in our
country.
Having a Health Insurance helps you overcome sudden medical
emergencies.
3.) Invest in a Systematic Investment Plans (SIPs)
It is one of the most simple and convenient manner to invest
money in mutual funds. You have the liberty to venture your money either
weekly, monthly, or quarterly. Systematic Investment Plans grant you an already
decided amount to be paid uniformly at regular terms. This type of investment
in mutual funds is regarded as the most safe and suitable kind in the market.
4.) Buy Real Estate
After the implementation of the Goods and Service Tax (GST)
in the year 2017, realty investors weren't very sure about their financial
security. However, the picture is likely to change in the year 2018. It seems
the government is looking for new ways to revive growth in the real estate
sector.
With the Real Estate Regulatory Authority Act (RERA) in
place, there is no place for false promises by real estate developers. You'll
also most likely not have to deal with cheating or delay in possessions. Also,
the rates are low all across the country. Owing to the good market conditions,
this can be the right time to purchase a house or a commercial property. But,
make sure to leverage the benefits of a home loan while doing this costly
transaction. Instead of paying the complete cost in cash, use a home loan to
pay a part of the total cost and save on taxes. What better time to invest in
real estate than now?
5.) Evergreen Fixed Deposits
It is a financial mechanism provided by banks where
investors receive a high rate of interest varying from 4 to 6.5 percent than
the normal savings. Here, your money is deposited in a Fixed Deposit account
for a certain time period without and you can't withdraw it until its maturity.
The maturity periods can vary from a week's time to 7 years depending on the
investors. And since your money is locked, you don't have any other option than
to save. Loan on your Fixed Deposit is available, which you can opt for in the
case of emergencies.
6.) Tax Saving Investments
Balance your portfolio well and keep a tab on the tax saving
instruments, while investing in the year 2018. You're eligible for a tax
deduction of up to Rs. 1.5 lakh under Income Tax Act Section 80 (C). Ensure to
use this carefully.
In the cases of traditional debt tax saving instrument, the
returns have become lower over the past few months. Invest in options like ELSS
to maximise your ROI.
PPF is another option you have. Though the rate of interest
has gone down recently, your money is safe here.
In addition to that, use financial loans for expenses like
child's education, home renovation. This will help you claim tax benefit under
section 80 (C).
7.) Invest in Balanced and Liquid Funds
Debt Mutual Funds and liquid funds offer moderate returns,
are tax-efficient, and will keep your hard-earned money safe. What percent of
these should constitute your portfolio depends completely on you.
8.) Have a Proper Budget in Place
Having a proper budget in place and sticking to it is
crucial.
Did you have a budget for 2017? If not, then it's time to
have one. And if you already have one, make sure that it doesn't have the same
loopholes as the one before.
Every single person needs to have a budget regardless of the
money he or she earns. Keeping a constructive budget helps you to track your
expenses. It will also help you in keeping a tab of your savings and planning
your finances well.
9.) Assess your Monthly Expenditure
Keeping track of your monthly expenditure to know where your
money is being spent. Spend some time going through your expenses and cut down
on unnecessary spends. This will help you in the future to build up your
savings.
10.) Sustain a Good Credit Score
An acceptable credit score assists you in a greater
acquiring ability that will help you in accomplishing your dreams of purchasing
a house or funding your child's education. Always keep a check on your credit
score.
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