Come the 15th of August 2024 and India will be celebrating 78th Independence Day, a symbol of joy, pride and honour for all of us. The sacrifices of our freedom fighters didn’t go as waste as India went from strength to strength over time.
Economically, India is the fifth largest in the world driven by a young demographic where 65% of the population are below 35, increased purchasing power and other favourable factors. While on a broader level, things look solid and bright, there still remains the scope for improvement as far as financial discipline goes.
We will discuss the financial habits one should adopt or maintain starting this 78th Independence Day.
Here’s a List of Financial Discipline That Will Lit Up Your Independence Day Mood
Invest in Mutual Fund SIPs is the True Celebration of Independence Day
Nobody has the money plant. However, mutual fund SIPs can be like that if planned and managed well over the years. Firstly, what is a mutual fund and how can you invest in it through a Systematic Investment Plan (SIP). A mutual fund is a pool of money collected from investors serving the common investment objective. The money invested here goes into various financial instruments such as stocks, bonds, debentures or others based on the type of fund you select.
For higher capital appreciation, it is advised to invest predominantly in equity mutual funds that invest a minimum of 85% in equities and equity-related instruments. The money invested in equities can go up and down based on the market movement. However, over the long term, things even out and investors rake in handsome returns. All you need to do so choose the fund wisely based on its long-term performance ranging from 5-10 years.
Whereas an SIP is a mode of mutual fund investment wherein you can park a specified amount each month. SIPs come with inherent benefits of the Power of Compounding and Rupee Cost Averaging.
While the Power of Compounding raises the invested money exponentially over time, the Rupee Cost Averaging ensures a lower average investment cost. The Rupee Cost Averaging Concept works as per the simple logic. When the market falls, your SIP investments buy more units at a lower price. As the market goes up, the investments will buy less units at a greater price.
Continue to invest in SIPs to maximise gains and consider raising the investment every year to ensure financial freedom in earnest.
Continue to Pay Your Loan or Credit Card EMIs on Time
Paying loan EMIs or credit card dues on Time? Keep up this good work to continue maintaining a strong credit history and allow yourself a pre-approved personal loan or a 5-minute loan offer. Maintain a flawless expenditure routine by saying NO to unnecessary expenses. This will help you ensure the required amount for smooth loan repayment.
Change to RLLR-based Home Loan Interest Rates This Independence Day
Home loan interest rates are broadly of two types – fixed and floating. Of the two, many opt for floating home loan rates, which is a good thing to do.
Within floating rates, there are about three interest rate benchmarks – Base Rate, Marginal Cost of Lending Rate (MCLR) and Repo-linked Lending Rate (RLLR).
While the first two do not offer transparency regarding the transmission of benefits owing to changes in the repo rate by the Reserve Bank of India (RBI), the last one corresponds 100% to the changes.
As the inflation softens, the RBI will cut the rates, reflecting a 100% effect on the RLLR-based Home loan.
Whereas if you have been servicing a home loan after 2016 and before 2019, you will likely be having the MCLR regime. Here the rate cut reflection will be to the tune of 60%. Also, there is a one-year reset clause, which means the rate once changed will remain constant for a year. So, the RBI rate cuts, which if happen in between, will have no bearings on MCLR-based home loan rates.
All that calls for switching to the RLLR-linked home loan regime, showing utmost transparency. Lenders can charge a nominal switchover fee for this transaction.
Don’t Delay Taking Term Life Insurance
Delaying term life insurance will only deprive your family the financial freedom in case of your unfortunate demise. A term life insurance offers your family a safety financial net in the form of the sum assured you choose while buying the policy in the event of your death. The best part is that the premium here remains the lowest among other life insurance products. What’s more, the premium remains fixed over the term.
Choose the Best Health Insurance Policy to Celebrate Independence Day
Health is Wealth. A phrase that may sound cliche but stays relevant in today’s times when its penetration in India is still far from ideal. Celebrating Independence Day with a comprehensive health insurance policy having maximum coverage is just the icing on the cake you need. And YES, don’t only consider the premium while choosing the policy. Check the policy terms and conditions holistically. Compare policies in terms of basic and standard features along with the premium amount to decide the best alternative for you.
Wrapping Up
Independence Day celebration feels even more special when you create the maximum scope for financial gains and assurances by investing in the right product, choosing the optimum security cover and reducing your debt to a significant level. The financial tips mentioned above in the wake of Independence Day are meant to ensure the same. Follow zarooribaathai.in for regular updates on finance, economy, sports, beauty, health and women empowerment.
