The dramatic onslaught of events witnessed in the previous year has emphasized on the need to manage one’s finances effectively. As the global economy recovers from the brunt of the pandemic, we present to you 5 staple techniques to manage your finances in 2021 irrespective of your current age, income and financial condition.
Create a budget and stick to it
To begin with the basics, being cognizant of your finances at all times is key to effectively managing them. One must prepare a budget to get a clear picture of their income and expenses. This would not only help you keep your spending in control, but would also help you realise how you could utilise your surplus cash to bring returns for you.
However, one must note that preparing a budget is only a part of the battle. It is essential to strictly comply with your financial plans by revisiting the budget regularly.
Contribute to your emergency fund
The hard truth of life is that no matter how prudent you are with your finances, large unforeseen expenses can always find their way when you’re least expecting them. With such scenarios in mind, it is wise to plan ahead for such expenses by setting aside a small amount from every paycheck towards an emergency fund. This emergency fund would not only help provide you a sense of financial security but also reduce your overall dependency on credit.
Be smart in managing your debt
A crucial step in managing finances is to wisely chart out a strategy for repaying any pending liabilities in your name. During the pandemic, the government pushed out various monetary policies to enhance credit facilities to those struggling financially. As a result of favorable monetary policies, various banks have taken a haircut on the high interest rates they usually charge to pass on the policy benefits to borrowers. In such a scenario, it might be a good idea to consolidate your debt under a single personal loan at a low interest rate. Bajaj Finserv Personal Loans available on Finserv MARKETS allow you to borrow up to Rs.25 Lakhs, starting at a low interest rate of only 10% per annum.
Plan ahead for your retirement
Planning for your retirement early on is emerging as a new concern amongst millennials. In a survey conducted by PGIM, it was found that over 51% of urban Indians don’t have a retirement plan in place. This could turn out to be extremely problematic in the long run, as living expenses only seem to be going higher with time. Thanks to novel insurance products in the market such as ULIPs, planning for your retirement is now easier. ULIP retirement schemes available on Finserv MARKETS offer you the benefit of getting insured under a life cover as well as generating wealth for your retirement by setting aside small amounts every year. These plans have emerged as effective wealth generation instruments over the long run.
Park your funds in Fixed Deposits (FD)
Fixed Deposits are perhaps the most convenient wealth generating instrument available today to park your funds with minimal risk and hassle-free documentation. Due to the fluctuations being witnessed in the post-pandemic market, opening a fixed deposit seems like an appropriate option for those with a low-risk appetite. The Bajaj Finance Fixed Deposit available on Finserv MARKETS offers a lucrative interest rate of up to 7.25% on your savings. This rate of interest is significantly higher than those being offered by most traditional banking institutions in the market today.