Holi is a festival of colours where we celebrate the victory of good over evil. Holi teaches us about love and forgiveness, peace, and the victory of good over evil, and yes, it also teaches us about financial planning.
On this auspicious occasion, we extend our heartfelt Holi greetings while acquainting you with various lessons of financial planning, budgeting, diversification, and investment to improve your economic life. So, without further ado, let’s get started!
Financial Planning
When preparing for Holi, you first make a list. From buying things to preparing food items, decorating items, inviting people, deciding on gifts, etc. Overall, the aim of these small tasks is to have fun with friends and family. Similarly, setting financial goals for yourself follows the same principle.
These financial goals provide direction and purpose, so setting clear goals is the first step towards better financial planning. You can use the ‘SMART’ technique when setting goals.
SMART is a method for making goals specific, measurable, achievable, realistic, and time-bound.
Diversification is Essential
Imagine playing Holi with just one colour. It might be good, but the real joy comes from the blend of different colours. Similarly, investing money in just one sector in the stock market isn’t wise; it can expose you entirely to the volatility of the stock market.
Just as there are various colours used in Holi, it’s beneficial to diversify your investments into different assets or sectors. This can include shares, bonds, and real estate. Each type of investment works differently according to market volatility.
For example, when there’s a downturn in shares, bonds can stabilise your investments, and real estate can provide good returns over the long term. By diversifying your portfolio, you can reduce your investment risk.
Burn Evil and Attain Freedom from Debt
The ritual of Holika Dahan during Holi symbolises the victory of good over evil. Similarly, it is essential to get rid of one evil in your financial life – the burden of debt. Excessive debt can harm your credit score and disrupt your financial situation.
Therefore, it is necessary to be smart and avoid unnecessary expenses. Instead of that, cultivate a habit of saving and always keep an amount equivalent to 3 to 6 months of expenses for emergencies. Conversely, taking loan is not always bad; for instance, if you are considering buying a house, taking a home loan isn’t a bad idea. In simple words, our point is to avoid debt until necessary.
As mentioned earlier, Holi signifies the victory of good over evil, so just like the burning of evil during Holi, you can exit underperforming assets and replace them with better stocks or other securities in your portfolio.
Avoid Unnecessary Expenses During Holi
Not just during Holi, but during other festivals too, you can avoid unnecessary expenses by following the tips below:
- Create a budget and stick to it.
- Make a shopping list to avoid buying unnecessary items.
- Avoid using credit cards excessively.
- Be cautious while shopping online, as customers are often tempted by various offers.
Celebrating Holi and Investment
While playing Holi, avoid harmful colours and opt for natural and safe alternatives. Similarly, when investing, we should make informed decisions with caution. Therefore, before investing, one should consider the thorough research of the company, growth prospects in the future, your financial goals, time horizon, and risk appetite. These are factors that can help you make better investment decisions.
Patience is Necessary in Investment
On the special occasion of Holi, various sweets are made in every household. In Maharashtra, the sweetness of Puran Poli fills every home, while in North India, delicious items like Gujiya are made. We all know how much effort and patience it takes to make these sweets, right from choosing the right ingredients to cooking them.
Similarly, in investments, one should not rush. Instead of being perturbed by the market’s ups and downs, it’s beneficial to invest for the long term. When you exercise patience and invest with the right strategy, you balance the market’s fluctuations and receive good returns.
By incorporating these financial lessons from Holi into your life, you can create a more secure and prosperous future for yourself. Just as Holi brings colours and joy into our lives, financial planning and prudent investment decisions can bring stability and growth to our financial futures.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
