This Diwali let us also illuminate the light of financial freedom to live a financially secure life for years to come
The time of Diwali is one of the most festive and beautiful times of the year. Diwali is that time of the year when everyone wants to buy new clothes, gold ornaments, gadgets, electronic appliances and several other items. All of us spent ample money during this festive season.
Diwali is an ancient Hindu festival celebrating the triumph of light over darkness and the renewal of life. Diwali literally means a "Row of Lights". Families light lamps, candles and fireworks to symbolise the triumph of light over darkness, and good over evil.
This Diwali let us also illuminate the light of financial freedom to live a financially secure life for years to come. The below article highlights the four personal finance essentials to be done in auspicious festival.
Buy adequate amount of term plan
Most of us are not aware of ‘how much’ insurance we need to buy to protect our family against an eventuality. If you have dependents or significant debts that outweigh your assets, you likely need insurance to ensure that your dependents are looked after if something happens to you. Purchasing a life insurance policy online could also be more cost-effective since companies pass on the savings from distribution, administration and courier expenses to the customer.
Resolve your debts
If you owe too much debt on your credit cards, determine how much you can realistically afford to pay off to your credit card company. Negotiate with your credit card companies to allow you to pay a “settlement” to resolve your debt. The settlement is another word for a lump sum that’s less than the full amount you owe.
You can also seek help of a non-for-profit financial counseling service centres available in your city. They will offer you one-to-one counseling. This service is usually free and your information remains safe and confidential with the counselor. These financial counsellors are well-trained and supportive. They help you resolve your debt issues.
Start investing for your financial goals
During Diwali we buy a whole lot of things for each one of our family members. We buy these gifts to celebrate the festive season with them and to make our family members happy. Similarly, the life of each one of us is marked with specific times for specific events like marriage, purchase of a house or vehicle, children’s education and their marriage and finally retirement. Each of these is goals have to be planned for well in advance and regular savings can provide exceptional returns over the long run.
Every individual decides upon a certain amount to be invested into the event. So to achieve our goals we invest. However each of our investments must be directed keeping in mind a certain goal and its time horizon. This enables us to ensure that we have adequate amounts of funds in times of need.
The power of compounding is phenomenal. Your savings grow exponentially with time, and the sooner you start the more will be the amount of returns. You may also consult a competent financial planner who has accurate information about products and the client’s needs.
Need to estate planning
One area which gets the least focus is estate planning. We work hard and save and accumulate funds throughout our lives to own assets such as property, cars, jewellery and even retirement investments. We would like to pass down our hard earned saving in a judicious manner to next generation. Whatever we accumulate during our life (earning minus expense + growth) forms our estate that we pass on to our next generations.
Estate planning is not limited to the wealthy people. Anyone who has a family must make sure he has a Will, an attorney who will take care of the affairs and also appoints a guardian for his children as lack of it will pass over the custody of your children in the hands of the court. An estate plan will ensure your life earnings are not wasted and will be passed over to your family to help them feel protected and secure.
This Diwali do work on the above four personal finance essentials to give your family the happiness and brightness they deserve.
Ways to save during Diwali