5 Simple Financial Planning This Dussehra

By Consultants Review Team Tuesday, 24 October 2023

Today is Vijaya Dashami, a festival with many different interpretations and celebrations throughout the Indian subcontinent. For some, it represents the noble Rama's victory over the fearsome demon king Ravana, emphasizing Rama's courage and steadfast compassion. Others celebrate this day in commemoration of the goddess Durga's victory over the buffalo monster Mahishasura, which represents the restoration and protection of righteousness and virtue in life.

Each of us possesses a demon. Few people can boast of a life free of demons, particularly financial demons that undermine one's ability to save for a financially secure future. Many people, even when confronted with bad circumstances, engage in behaviors that contribute to financial issues. Such behaviors may include:

Extravagantly Exorbitant

Slow to earn, fast to spend. This is a bad habit that has wrecked many families and led to financial catastrophe for many more. Spending money has gotten more convenient than ever in this day and age of contemporary technologies. We can easily disburse thousands of rupees with a simple card swipe, mouse click, or smartphone tap.

Nonetheless, the process of making money has not become any easier. This emphasizes the need of cultivating mindfulness when it comes to our spending habits and staying within our financial means. Regardless of how easily money might be spent, the process of obtaining it is not growing any easier.

Ignoring the necessity of a budget

As George Washington famously stated, "We must consult our means rather than our wishes," the necessity to conserve and preserve enough begins with the intention to have a budget in place. A budget is more than just numbers on a page; it encapsulates our hopes and desires for a better future. It not only tracks our income and expenses, but it also serves as a warning system, stopping us from exceeding specified spending limitations.

Budgeting is consciously directing your money rather than wondering where it went. It aids in iscriminating between essential and non-essential purchases while also warning against excessive spending that exceeds your income. Nonetheless, some people neglect the necessity of budgeting and spending money without tracking how, when, and where it is spent. This might have a large and widespread influence on their financial accounts.

Inadequate Investment

Saving money is not enough; you must also invest it to produce profits and help it grow. Saving money is important, but it is insufficient since inflation erodes the purchasing value of money over time. Making wise investing decisions is critical to preserving the purchasing power of your cash.

The first step in investing is to align your investments with your financial objectives. In order to have a solid financial future, it is critical to identify where and how much money should be allocated. Consider automating your financial activity after you've made these investment decisions. Transfer funds from your checking account to your savings and investment accounts on a regular basis. This allows for regular savings and investments without the need for constant thought.

Certain people reject the concept of financial investment and continue to save money in savings accounts. The low interest rates on these accounts cause the money's value to erode over time, resulting in unanticipated financial setbacks in the long run.

Choosing Not to Purchase Life Insurance

Those who doubt the importance of purchasing a life insurance policy should consider if they have effectively protected their loved ones' financial well-being. Your family depends on you beyond your lifetime, and you definitely want to provide for them. Furthermore, you don't want your family to be burdened by financial commitments during difficult times. You may ensure that any outstanding bills, such as a mortgage, auto loan, personal loan, or credit card amount, are covered by choosing the right life insurance policy.

Life insurance allows you to leave a lasting legacy for your loved ones or a favorite charity. It can be used to help future generations or to contribute to a cause important to your heart. Certain life insurance policies, such as whole life insurance, have a cash value that can grow over time. You can access this monetary value while you're still living by taking out loans or withdrawing money. This is an excellent opportunity to save for retirement or increase your retirement income.

Furthermore, life insurance helps to protect your possessions. If you own a business or other important assets, life insurance might act as a safeguard in the event of your death. For example, in the case of business ownership, life insurance can ensure that the business continues to operate after your death. Some, however, are too ready to dismiss life insurance as just another monotonous investing choice that may be avoided. Its significance in one's financial portfolio becomes clear only in the event of an unexpected and unusual loss of income, such as death or disease.

Having to Rely on Debt

"Who goes borrowing, goes sorrowing" is a well-known adage that depicts how the practise of amassing debt may cause so many individuals to feel overwhelmed.

Lending exacerbates unpleasant emotions. You are aware that you must repay, whether now, tomorrow, or the next day. Borrowing money through loans can be problematic, especially if not done carefully. When you obtain a loan, you effectively obtain funds from a lender in exchange for the promise to repay the borrowed amount, plus interest, within a specified time frame. Failure to make regular loan payments might harm your credit score and result in a number of financial implications.

Loans can be obtained for a variety of purposes, including property purchases or business start-ups. Nonetheless, it is critical to only pursue loans that are compatible with your ability to repay. Personal loans, unsecured credit cards, and "Buy now, pay later" schemes have made it easy for today's generation to rely on credit unduly. Although not all credit-based borrowing is harmful, the inability to discriminate between essential and non-essential expenditures can have a negative impact on your financial well-being.

How you spend reflects your lifestyle, but only if you know why you want to project a certain image rather than simply loosening your purse strings aimlessly. We encounter several financial monsters in our daily lives. However, depending on how soon you want to address your financial troubles, each of these demons can be slayed with remedies. This Dussehra, let us not just burn noise-making crackers, but also the bad fiends within each of us that prevent us from respecting money for its value and utility.


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