Saving and Investment Tips for a Hassle-free Financial Journey

Last Updated : March 3, 2022, 12:56 p.m.

Executing the right financial steps depends on your financial literacy. What saving & investment tactics should you employ during market downturns? Should you withdraw all your investments and keep the same in your bank account? At what time should you buy insurance for optimum benefits? A lot of Indians err on these important financial aspects, and the reason for the same is our poor financial literacy. According to a report from The Logical Indian, only 24% Indians are financially literate. However, such a poor literacy rate is not surprising as most may not have finance as part of their curriculum. But you can learn those saving & investment tips here and make the right financial decisions. Let’s check out the same.

Here’s a List of Saving and Investment Tips

The key lies in ensuring flexibility at all times, be it when things are going as planned and when they are not. To ensure the same, one needs to be a step ahead in planning and execution. Let’s learn those tricks.

Start Saving Early

A nice and early start to savings will only help you attain more flexibility. It is expected that the responsibilities when starting your professional lives remain much lower and thus allow you to save and invest more. But most of us like to spend only during those days and, therefore, fail to generate enough for ambitious goals such as wedding, education or even retirement. Most financial advisors suggest saving 10-15% of the monthly income. But if you can save more, better! The extra savings will work as a contingency fund and help you prevail through uncertain times.

Differentiate Between Needs and Wants

The prime reason for the financial crisis of most Indian families is their failure to understand the difference between ‘Needs’ and ‘Wants’. When something can be done by spending INR 5,000, why spend INR 10,000 for the same? More so when you have just started working. If your income allows you to spend extra, have that invested in products such as mutual funds instead. It will help you earn and allow you the flexibility you seek.

Don’t Fear Stocks – Use Them to Your Advantage

Volatility which is synonymous with stock investments can make many nervous. But that should not make you stay away from investing in the same. Stock returns can be in the high double digits over the long term. If you don’t know the market dynamics, invest in stocks through mutual funds. Fund managers supervise and manage your mutual fund portfolio on your behalf. So while choosing a mutual fund, check its performance as well as the profile of the manager in charge of the same. You can do all that online.

Be Proactive When Repaying a Loan

You may think you’ve got the best loan offer in the market by taking seriously the words of bank executives who could manipulate when selling products. Trust your eyes rather the words of executives. Go online, see the interest rate of loans before deciding which to choose. In case your loan is expensive, switch it to a new bank offering you the best interest rate deal. Saving is imminent with such a move, and you should not hesitate to do so.

Use Your Credit Card Wisely

The privilege of having things with a few clicks makes people shop galore with credit cards at both online and offline stores. Reward points, cashback and discounts make us forget our limitations. But doing so will only cause headaches for you with tall bills. And if not paid fully and on time, the high interest rate of 30-40% per annum will only make matters worse. So, know your limit and adhere to it.

Be Insured Early

Getting insured early comes with the obvious benefit of low premiums. Even the coverage amount can be potentially high in that case. This principle applies to both term and health insurance. What’s more, the term insurance premium once decided remains fixed throughout the policy term. So, if you buy term insurance in your early 20s, your premium could be 2-3 times lower than the one you will get when buying insurance in your mid or late 30s. Whereas the premiums of most health insurance plans remain the same for at least five years. If you buy that too at a young age, you stand a good chance to save more.