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Though, anytime is the ideal time to set and have a financial plan. But the start of a new financial year is the time when we should look at how our plan is working and do we need some changes? It is also the time when many of us go through the cycle of job changes, promotions and salary hikes.
A fresh perspective is always good to strengthen our goals or to add new ones. In this article, we will attempt to identify mistakes we should avoid while planning our financial goals.
Not looking at the bigger picture
Try not to fill your goal sheet with wants; yes they are important. But it is equally important to service our needs, both known and unknown.
So, when you are planning for that destination wedding, also plan for your emergency funds. Both require equal attention. For an emergency fund, you could open a digital savings account. It is an easy and paperless process to open a zero balance savings account. You just need to key in your details and your account will be processed in minutes. The biggest advantage of a zero balance account is that you don’t have to maintain any minimum balance in your account, and you earn interest on the money deposited in the account.
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The digital savings account offered by Kotak811 is backed by a complimentary virtual debit card to take care of online shopping and digital payments. You can also get an FD backed secured credit card without any credit score.
Yes, save for your next trip or big purchase, but also start saving for unforeseen situations.
Execute your plan
Most of the time, we end up planning. But it is more important to execute the plan and stick to it until we can see ourselves progressing. Like any other goal, financial achievements will also require constant support. So, if you have decided to invest in a recurring deposit for say, a year, stick to the plan. Apply for an ECS mandate, and let the money get debited from your account automatically on the specified date. If you wish, you can also look for SIP investments; start small but be consistent.
Another way to fuel your goal is to cut down on unwanted expenses and use the money on investments or savings.
Set realistic goals
Your financial goal should be an achievable one. It is important to break the long term plan into sizable short term plans. So, when you complete one short term plan, you will be motivated to go all the way. Always, analyze your performance every quarter. This will keep you grounded and aware of where you are.
Before deciding on a purchase date or time, consider your source of income; then calculate how much money you can save for the purchase and how much loan you need to take out from the market. Because you don’t want to be buried under debt, you can’t pay off. So, take rational steps; don’t try to launch too many goals at once. Identify the major ones and work on them. If you do so, you will not be disappointed at the end of the journey.
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Have fun while setting your financial goals. Like your passion, this is your money, and you don’t have to compare yourself with someone else. Know your current financial situation, work on reducing unnecessary expenses, and begin to plan for a secure and healthy future. Enjoy!
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