Diwali is around the corner and most of you are busy planning the celebrations, which will involve a good amount on spending. So why don't you also gift yourself some financial gifts this Diwali? Here is how you can take the right financial action and cleaning up some financial mess.

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Buy term life, health insurance
You need to buy sufficient term cover for all family members who are bread winners in your family. Though people have realised the importance of having term insurance cover, the challenge lies in converting that awareness into reality. The same argument holds for buying health insurance cover, which becomes more important if you are 45 years of age or more.

When you apply for an individual health cover, you will not get most of the benefits that you getting from the health cover provided by your employer. This becomes more critical if you lose job or decide to leave the job. Besides, the older you get, higher will be the premium you have to pay. Or the policy may come with many do's and don'ts.

Check discount offers thoroughly
Due to the emergence of online shopping, the world has truly become a buyer's market. The problem is you end up buying things you do not need, but are tempted to buy. So, in case you can't control the urge to splurge then make sure to weigh all the offers available online and offline. Due to heavy competition from online retailers, even stores and malls are offering huge discounts. Do a thorough price check across different platforms before spending your hard-earned money. You also need to control your impulsive shopping.

Increase your retirement kitty
The importance of retirement planning is also something people are aware of, but still don't do it correctly. Mistakes include both not doing the right retirement planning and not investing in the right financial instruments. If you are young and have 15 to 25 years before you retire, then you need to start investing today. If that investment is already made, do increase the monthly contribution towards your retirement kitty. You can gift yourself a mutual fund Systematic Investment Plan (SIP) this Diwali, a small percentage of your yearly allocation towards Public Provident Fund and also increase your Employee Provident Fund contribution. Do a comprehensive financial planning and invest in the right product mix and retire peacefully.

Streamline your loans
Before you take another loan for funding any luxury purchase during this Diwali, I suggest you first have a good look at your existing loans, such as car and home loans. Do you know that you can negotiate the interest rate with your bank and get it lowered based on the current interest rate structure? This will help save you a fair amount of monthly outgo, which can be further invested in a mutual fund via SIP.

So, make sure to do a thorough clean-up of your finances like you do your Diwali safai, that is, the ritual of cleaning your house. Just as you spend time,effort and money on Diwali cleaning, cloths, electronic gadgets, etc, make sure to do a deep financial cleaning and buy the above mentioned financial gifts for securing your family's future and create a good amount of wealth in the long run. Happy Investing, Happy Diwali!

(The writer is chief gardener, Money Plant Consultancy)

Source: DNA Money