Financial security isn’t just a desire but a basic need in today’s world. With a strong financial backup, taking risks and exploring an ample number of fields becomes easy. On top of that, it relaxes our mind and worries about instability in future blurs out from our sight. As we grow into adults and face the real world of independence, one thing that scares us the most is being broke! Everyone has some insecurities but financial insecurity is perhaps one of the most dreadful of them all. We won't ever want to get stuck in there and therefore, we need an elaborate financial plan. As a beginner, things seem even more complicated and a stable stone is tough to look for.
So, to end your dilemma and give you a taste of the fruit of savings and investments, here are 8 tips that will help you to secure your present and hence, your future too:
Short term plan to save your pocket in present
1. Put together your emotions
First things first, when you get your salary or say, pocket money, don’t fall into the trap of ‘You Only Live Once’ and spend it all in one go. You surely should fulfil your dreams but spending recklessly is something that might hit you hard in the future. Start saving your money in small sums and aim at expanding them.
At first, don't be too ambitious, set up small monthly goals and spend and save according to that. In simple words, if you earn in thousands, save your ‘thousand’ and stretch your ‘hundreds’. Things might feel tough at first but this will help you in keeping your expenditures under a proper check.
Just start earlier and you will have enough time to turn your tens into millions if not less. Here’s how to achieve that goal in the long run.
2. Say NO to credit cards
No matter how fancy and classy carrying a credit card sounds, the crux is -if we are aiming to secure our future financially, credit cards will never let us do the job. With high premium payments and confusing plans, they very quickly trap customers and we all know they are no better than pre-payment methods like debit cards. Especially for beginners, it is not at all advisable to step into the vicious cycle of credit cards, the farther you are, the better you'll end up.
3. Use saving and investment planning apps and online tools
Thanks to the expansion of global economies and on top of that, digitalisation, there are several amazing free to use and very user friendly tools and handy apps that help you not only in keeping a track of your long term investments plans, but also manage your daily savings. Plus, some of them like Jar, offer various investment tools where you can either invest yourself or let the system do it for you.
With its auto-invest feature, Jar pours out the hassles of investment terminology out of your life and invests on your behalf. With these super smart tools, your investment plans will surely take a long leap and benefit you in the long run. Deep dive into this here and explore how this happens.
4. How much to save?
With all the discussion surrounding saving, it is possible that people think being stingy is the key to financial independence. However, that’s not the case. How much you have to save depends first on your earnings and next on your rational expenditure (take note, it's rational and not reckless).
We all have different habits relating to spendings, mainly due to the different circumstances we all live in. What you spend might be too little or too much for someone else. Hence, you first need to track your basic spending and then carry on any further saving or investment plan.
Long term plans to vanish the havoc in your bank balance
5. Start your investment journey with stocks
Investing in stocks is an amazing way to sort out your long term investment plans. However, understanding the stock market is not very easy. You will need proper knowledge about shares and all other important (at least the basic) terminologies surrounding the bulls. However, it must be kept in mind that stocks are pretty risky and volatile to hold in their general nature as they fluctuate like the east coast weather.
One way you can start this is by using online investment planners and tools that deal with the share market. Some of them even have facilities to deal in gold (for example, Jar’s easy to use gold trade features) and help you invest even in tens if not thousands. Research as much as you can before investing in stocks,
6. Segregate your savings, current and investment account
When you begin your long term investment plan, you must first set clear lines between your savings and investment account. While a savings account will discourage you from withdrawing money frequently from it, your self planned investment account can help you in keeping the things tidy and will clear your mind from confusion of where to use money to invest!
7. Get a grasp of concept of bonds
A bond, in simple words, refers to the sum that you lend either to a company or a government entity with a promise to repay it within a certain period of time. What makes the bonds profitable is the interest rates. You receive a certain amount as an interest on the money that you lend. Needless to say, bonds are quite less risky than stocks.
One thing that is to be taken care of is that bonds are generally stretched over a long period of time and therefore, it is generally advisable to let them be just a little part of your long term investment and saving plan.
Now, since we are talking about long term financial security plans, why not bring in the very traditional but still reliable concept of funds. Funds like mutual funds are a very safe way (upto a certain extent with proper plan) in keeping your money safe and even multiplying it. You can buy a diverse collection of such funds instead of any stock or bond. One security that they provide is that they are a much safer step than the unreliable individual stocks. There are even several online apps and financial tools that help you in directly investing in mutual funds without even needing any broker.
A diversified financial portfolio is a better financial backup. That’s because there is less risk involved in investing when you invest in a number of different plans. With mutual plans, you can invest in index funds, foreign bonds, government securities, treasury bills, FD, shares, digital gold and many more portfolio diversifiers. These will ensure that you fulfil your dreams in future while also taking care of your long term financial goals.
9. Invest in Gold
Further talking about diversifying your financial portfolio, you must also keep in mind the other factors that take down the value of your money like inflationary tendencies. With a rise in nominal terms, the real terms actually go down. While we generally ignore the fall in real money because it affects everyone equally, it should not be the case.
For hedging against inflation, investment in Gold is superior. And the best way to invest in Gold? Digital Gold. With assured 24 carats quality assurance, government certified and minimal maintenance costs, Digital Gold helps you save your finances not just against inflation but deflation too alongside diversifying your portfolio. When compared to other common investment tools, this precious metal has remained stable even in volatile markets. You can start investing in Gold with just Rs. 10 through the Jar app.
Give a proper direction to all your financial goals with these tips. They will help you in not just maintaining a diversified investment portfolio, but in managing your investments too.