It’s been a week in 2023 already! In last week’s edition, we discussed new year’s resolutions to keep your finances fit. This week, let’s examine five hacks to kick-start the new year on a financially healthy note!
Start with Small and Gradual Improvements
Suppose you have decided to start investing through SIPs in stocks and mutual funds. In that case, you can initially start with small amounts and gradually increase your monthly investments as your understanding increases. Similarly, start accumulating small amounts if you have decided to create an emergency fund. By taking these small steps, you can drastically increase your finances by the time 2023 ends!
Focus on Asset Allocation
For the calendar year 2022, the Indian benchmark indices, namely the Nifty50 and the Sensex, barely gave any returns to investors. As a result, those investors who jumped into equity markets seeing the stock market rally of 2020 and 2021 were left dissatisfied. Hence this raises the need for asset allocation. If you had made some investments in fixed-income instruments, you would have been at least better off. Thus, an essential tip for 2023 is to focus on your asset allocation based on your risk profile and return expectations.
Learn a New Skill
Although this hack is not directly related to one’s financial life, learning a new skill in 2023 might actually be beneficial. You could learn a new skill that syncs with your existing business or job profile. This could also help you earn extra income when you become a pro. This additional income can go into meeting expenses, investments, or creating emergency funds.
This hack is just a reminder to purchase adequate life and health insurance for you or your family members if it has not been purchased yet! Healthcare costs in India are rising drastically each year, and one fat health expense can drastically wipe out years of your savings if an insurance policy does not cover you. This will also interrupt your investment cycle. Not buying insurance can thus create a negative chain of events in your financial life.
Tax Planning is Necessary
There are only three months left for FY23 to end, and it’s high time you should do your tax planning if you are not done yet. This can be done by availing of the full benefits of income tax exemptions wherever available to reduce your taxable income.
These simple yet effective hacks will kick-start your financial journey in 2023. The focus should be on small improvements each day. This will create a huge compounding effect on your financial life as 2023 ends!