Diwali is here! The streets are crowded, shops are teeming with people and earthen diya vendors are doing brisk business. These days Diwali has become so much about materialistic things, that people may have forgotten the significance of the five days of Diwali. Each day has an important meaning, which can be adapted to our finances as well.
1) Dhanteras: I have come across so many investors who have 10-15 mutual fund schemes, 10-15 stocks and 10-15 insurance policies. Obviously, it then becomes very difficult for them to manage their portfolio. Here are a couple of things you can do to clean up your portfolio:
Finally, this Dhanteras, if you still want to buy gold, then do so in form of Gold ETF or the Sovereign Gold Scheme. Jewellery, which has 20-25% overhead charges, makes it unfit as an investment.
2) Chhoti Diwali: on this day, people take oil bath to remove all impurities from their body. How about thinking of removing impurities in your financial life like excess loans and work on improving your credit score? Loans like credit card loans and personal loans not only add stress to an individual's life but reduce your credit score thus limiting your ability to get the loan which you really need - ex: a home loan.
3) Diwali: the festival of lights is marked by bursting crackers, doing puja and exchanging gifts. While you spend on crackers and gifts, how about spending on hiring a financial planner who can help you make investments based on your financial goals? Most investments are made in an ad-hoc manner and hence one ends up having investments which do not suit one's risk profile or are underperforming.
4) New Year Day: With the New Year, take a pledge that you will save more and ensure that you follow your financial plan and work towards financial freedom.
5) Bhai Dhooj: Along with material gifts, how about the brother and sister gifting a financial education course which would help the siblings manage their money better?
This Diwali, make it truly happier and more prosperous by following a few financial planning steps and secure your financial life.
The writer is director Finsafe India and co-founder, Womantra