10 smart financial moves to make in 2018

“Financial planning is about more than good advice or investment returns. It’s about providing guidance you can trust.”

It is always beneficial to plan ahead and have a plan of your future finances ready. You certainly don’t want to make the same financial mistake you’ve made before. It is also important to plan your investments well.

Budget 2018 was recently announced and while there is no change in personal income tax, long-term capital gains will be taxed at 10% for amounts exceeding Rs 1 lakh, without indexation.

So how should you plan for 2018 to make it financially viable?

To make your 2018 financial year a huge SUCCESS, here are 10 financial moves you can take:

1.) Venture into a term plan or insurance

Life has its own course of operation. You can never be aware of what is going to happen next. It is unpredictable and therefore it is important that you plan ahead.

Invest in a Term Plan, as a way to ensure your family’s future. The term plan or term insurance is a financial protection that financially helps your family in your absence. Term insurance is becoming more and more popular as it comes with many benefits.

2.) Have health insurance

Health is wealth and there is no denying that fact.

Whether you have a family or live independently, investing in a health plan should be your first priority. Accidents and illnesses are not rare, and the sad thing is that medical treatment is not cheap in our country.

Having Health Insurance helps you get through sudden medical emergencies.

3.) Invest in Systematic Investment Plans (SIPs)

It is one of the easiest and most convenient ways to invest money in mutual funds. You have the freedom to risk your money on a weekly, monthly or quarterly basis. Systematic Investment Plans give you an amount already decided to be paid evenly in regular installments. This type of investment in mutual funds is considered as the safest and most suitable type in the market.

4.) Buy Real Estate

After the implementation of the goods and services tax (GST) in the year 2017, real estate investors were not very sure of their financial security. However, the picture is likely to change in 2018. It seems that the government is looking for new ways to revive growth in the real estate sector.

With the Real Estate Regulatory Authority Act (RERA), there is no room for false promises from real estate developers. It’s also very likely that you won’t have to deal with cheating or holding delays. Also, rates are low throughout the country. Due to good market conditions, this may be the right time to buy a home or commercial property. But be sure to take advantage of the benefits of a home loan while you’re doing this expensive transaction. Instead of paying the full cost in cash, use a home loan to pay a portion of the full cost and save on taxes. What better time to invest in real estate than now?

5.) Evergreen Fixed Deposits

It is a financial mechanism provided by banks where investors receive a high interest rate that varies from 4 to 6.5 percent on normal savings. Here, your money is deposited in a fixed deposit account for a certain period of time and you cannot withdraw it until it is due. Maturities can vary from one week to 7 years depending on the investors. And since your money is locked up, you have no choice but to save. The loan on your fixed deposit is available, which you can opt for in case of emergencies.

6.) Tax Saving Investments

Balance your portfolio well and keep tabs on tax saving instruments while investing in the year 2018. You are entitled to a tax deduction of up to Rs 1.5 lakhs under Section 80 (C) of the Income Tax Act. Make sure you use this with care.

In the cases of traditional debt fiscal saving instrument, profitability has been reduced in recent months. Invest in options like ELSS to maximize your ROI.

PPF is another option you have. Although the interest rate has recently dropped, your money is safe here.

In addition to that, use the personal loan for expenses such as children’s education, home renovation. This will help you claim the tax benefit under section 80(C).

7.) Invest in liquid and balanced funds

Debt mutual funds and liquid funds offer modest returns, are tax efficient, and will keep your hard-earned money safe. What percentage of these should make up your portfolio is completely up to you.

8.) Have a proper budget in place

Having a proper budget and sticking to it is crucial.

Did you have a budget for 2017? If not, then it’s time to have one. And if you already have one, make sure it doesn’t have the same loopholes as the old one.

Every person needs to have a budget regardless of how much money they earn. Keeping a constructive budget helps you keep track of your spending. It will also help you keep track of your savings and plan your finances well.

9.) Evaluate your monthly expenses

Track your monthly expenses so you know where your money is being spent. Take some time to review your spending and cut back on unnecessary spending. This will help you build up your savings in the future.

10.) Maintain a good credit score

A decent credit score helps give you greater affordability to help you fulfill your dreams of buying a home or financing your child’s education. Always check your credit score.