Planning your finances and getting your budget right is now more important than it has ever been due to the pandemic’s deleterious effects on the global economy. Several people were laid off, and many experienced pay cuts.
As the pandemic continues, the probability of the market getting more volatile is high. Hence, you should start paying attention to your finances by filing for taxes timely, building an emergency fund, making use of a personal loan rather than denting your savings for varied expenses, etc. To help you out with your finances, we have curated a list of tips that will prove very helpful in 2021.
Invest your money
Try to look for good index or equity funds and invest a small amount in them every month. You can go for SIPs as they provide you with good returns depending upon the risk associated with them. You can invest in gold or silver to ensure a safe investment too.
Also, invest a substantial amount in fixed deposits or recurring deposits which will yield great returns with time. So, when you retire, you will end up with a healthy financial corpus.
Build an emergency fund
You need to start building an emergency fund as it helps during unforeseen emergencies that may need you to be financially healthy. You can start creating it by setting a small percentage of your monthly income aside for the fund.
Take external financial help
In case you require financial help because of an upcoming wedding expenditure or a house renovation or any urgent medical expenditure, and you don’t want to deplete the savings, you can turn towards a personal finance by fulfilling the lender’s personal loan eligibility criteria.
These loans are designed to suit consumers’ needs, and hence, you get quick approval through a smooth application process with easy documentation. You can consolidate your debt through these as the personal loan interest rates are affordable, and ultimately you get to pay a single EMI only instead of paying many of them with hefty interests.
Categorise and calculate expenses
It is essential to calculate all your expenses by dividing them into categories. Firstly, you can calculate your monthly expenditures in different areas like instalments, utilities, etc. After which, determine your quarterly expenses like education fees, EMIs, etc.
In the same way, you can analyse any other recurring half-yearly or annual expenses, or if any major expenditure is coming up like furniture, television, etc. After evaluating these, create a spending and savings plan accordingly.
This year carries the potential to become a roller-coaster ride given the pandemic, which is why advance preparation is a must. Therefore, apart from budgeting for 2021, keep the option of availing a personal loan open. Doing so will save you from digging into your savings, should an emergency arise.
So, without much ado, utilise these tips for smart spending.