Top 5 Financially Savvy decisions to be taken in this financial New Year

Financial savvy decisions help you to utilize your money effectively and get optimal returns on the same. The financial moves you make now will determine whether you’ll thrive financially or have a financially secure future during the course of this year. Firstly, you need to set your financial goal according to your needs and resources and then take the financial moves to achieve your goals. Below mentioned are the top 5 financially savvy decisions to be taken this financial New Year:

1. Going cashless: In 2016 government pushed demonetization, which has created a new era for cashless transactions. If has become evident that it is important to know the usage of credit, debit cards , banking , and mobile banking .Online banking is not only convenient but also saves time and cost . You should also Link your Aadhar card with bank account and investments that will further helps to buy an online insurance policy and even an NPS account.Also in future, it will be easy for bank portability.
2. Investing:Saving money and investing it strategically is essential for a secure future and to make your money grow. There are various channels where you can invest your money like Mutual Funds,equity, SIP , Gold ,bonds etc but  You should invest according to your risk appetite and income. Although Market movements and timing plays an important factor while investing in market linked investments but it is advisable to keep investing regularly and follow your financial goals instead of deferring due to market movements. In present scenario investing in SIP can be considered a best bet. It helps to combat the market uncertainties by investing regularly and spreading the risk across time and allows the money cost averaging.

Investing in PPF and VPF : Traditionally, fixed depths were considered as safe investment options. But with demonetization, the FD rates have dropped to 7 %. So it is better to opt for more lucrative options like investing in Public Provident funds and Employee provident funds (EPF) which are more secure and unlike banks, government cannot cut the PPF rates beyond a point. If you are salaried, FEPF is statutory you don’t need to bother about it, it will fetch you good returns. You can also use voluntary Provident Fund (VPF) to build up the debt part of your portfolio.

Gold: It is advisable to invest not more than 10% of your investment portfolio in gold as financial experts expect that gold prices may drop further due to uncertainties in foreign markets.

3. Shifting your loan to MCLR:

If you have taken a home loan, you might be paying a higher interest if you loan is linked with the prime lending rate or the base rate .While MCLR (marginal cost of lending rate) is lower than the lending rate.So if there lies a difference of 50-60 base points between your existing rate and new rate, then it is advisable to switch to MCLR by paying an extra conversion fee. This will help you to cut down on your EMI and in turn saving money.

4. Don’t let your cash be idle: Sometimes it happens that we let our cash be idle in the saving account and just that 4% interest. But that cash can be used for better returns. You can open a fixed deposit or a better option is to invest this money in short term debt funds which can deliver up to 7-8% returns annually also in short term debt funds you can get tax benefits and have the flexibility to withdraw or invest more as per your requirement.
5. Real Estate: Buying own house: Demonetization had hit the real estate sector badly .Property rates have dropped drastically. A lot of sellers want to sell of their property at very low rates .It is expected that property rates will future drop reducing the demand further reducing the rates.So if you are looking for buying a house or property, this is the best time. However, one should buy a property for personal use only as buying a property for investment purpose won’t be a good idea as the rates are still too high.

Lastly, apart from the above mentioned moves it is always better to consult a financial advisor. A financial planner will help you achieve your financial goals by strategically utilizing your money to get optimal returns.  Also remember that  Financial independence largely depends on how well you use your money, thus you need to create a contingency fund that you can use in case of emergency .It is good to be self-sufficient and have a corpus amount for uncertainties rather than depending on others.