The Flexibility One Should Have for a Smooth Financial Journey

Flexibility is the key to dealing with the financial challenges that most of us face in times of inflation and uncertainty. You need to have the financial flexibility to absorb shocks emanating from the market fall. Besides investments, things can go wrong with loans which if not taken at the best interest rates will only pile on to your financial misery. But as they say, it’s better to be active than reactive to the situations. One needs to follow that principle in real time too. We can help you understand such financial principles. Let’s learn those here.

So, How to Ensure Financial Flexibility at All Times?

Financial flexibility is indicated by having enough to deal with the ups and downs, paying less than your peers towards loans and other stuff, getting adequately insured against unforeseen events, etc. You can ensure all by being financially smart and applying the right strategies.

Save This Much from the Time You Start Earning

Financial advisors suggest saving a minimum of 10-15% of one’s income. But don’t take it as a rule. If you can save more, do so to ensure the flexibility you may need in the case of an extended job loss due to accidents or any other reasons. Make good use of the extra savings by putting them into avenues such as stocks, recurring deposits, fixed deposits, etc.

Investment Strategies You Should Implement for Financial Flexibility

When it comes to investments, choosing the right tool is paramount to steer through uncertain terrains. Investments can go up and down and raise your pulse enormously high if you don’t feel comfortable seeing such fluctuations. Stocks despite having such traits are still recommended for you given their immense earning potential. With a sustained positive market cue, stock returns could elevate to unimaginable highs. Whereas when markets fall, stock returns could crash in no time.

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So, there requires that expertise to ensure you sail through both good and bad times. But, can it be the case with ALL when penetration by the Indians into stock investments is lower than those living in the US, China and other powerful economies? Maybe not! But investing money into stocks through the top-performing mutual funds will help your cause immensely. Fund managers with years of market expertise steer your mutual fund investments through thick and thin.

While all these statements hold, checking the credentials of the fund manager and the performance of the fund you want to invest in is paramount. You can do both these online. Choose from the fund managers having a successful and long track record of handling investment portfolios. Whereas the fund that has given the best returns across different points of time should be your choice.

Know the Optimal Usage of Credit Cards

Credit cards let you enjoy your life and the privileges they give to you till you use them optimally. The moment you use them beyond the tolerance limits, it will start causing financial worries for you. The tall 30-40% annual interest that comes into the picture by paying the due partially can push into a never-ending debt trap if not corrected on time. But why invite such a situation when you can shop with great discipline to keep your credit card bills affordable each month? Check your income and understand your limits as well as needs before adding shopping. You can thus pay the credit card bill in full and prevent unnecessary interest burden. With that, you can spare for emergency needs as well as investments.

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Compare Interest Rates Before Applying for a Loan

We all know fairly about financial products thanks to the growing advertisements shown on TV and digital platforms. But these ads may not show you the whole picture. That you can get to see in real time. Talking about loans, we hear a lot about the benefits of a balance transfer. It is a process by which you can transfer the remaining loan balance to a new lender at a lower rate of interest. But instead of getting to a situation where you ask for a balance transfer, pick the best rate while choosing the loan itself. It will help you save much more. Go online to compare the interest rates of different banks and NBFCs for loans. Pick the one with the lowest rate for a smooth financial journey.

All Your Financial Planning Remains a WASTE If You’re Not Insured

Getting insured against unforeseen incidents such as hospitalization and death should be your top priority. All the financial planning you do will come to no use when you see your savings getting consumed upon hospitalization or even your death in no time. Take term insurance when starting your professional life. The premiums will be much lower in that case. More importantly, they will remain fixed throughout the policy term. The sum assured payable to your family in case of your death during the policy term remains much higher than competing life insurance products. For health expenditures, trust feature-rich health insurance with a mix of the right sum insured and premium amount. The sum insured is the amount you can get in case of medical emergencies.

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We’ve focused on the things to do when beginning your financial journey rather than reacting to the situation you may face later. Going this way ensures flexibility to meet the changing needs. However, despite doing everything right at the beginning, you may face a speed bump. Should it happen, you need to change your plan to stay on course.

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Personal Loan Interest Rates February 2024
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
SMFG India Credit12.00% - 24.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates February 2024
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.70%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%