Everyone's situation is different when it comes to personal finance. No two people have the same bills, rent, debts, or way of life. When you're ready to take charge of your finances, you'll need a strategy that addresses your individual issues.

When it comes to the younger generation or Gen-Z, they’re way ahead in getting their finances in order. With growing financial literacy via social media, Gen-Z has found its way out. And the statistics speak volumes; the pandemic gave rise to over 6.9 crore new Demat accounts in India, per livemint.com, May 2021.

Thus, making financial goals is positive and hopeful because it demonstrates a vision for a better future and a desire to help yourself get there. To increase your chances of keeping on track, make sure your goals are clear, explicit, and reasonable.

Whether your goal is savings, investing, clearing debt, or whatever you are aiming for, it will be more effective if you set aside a set dollar amount each week or month towards your goals and automate as much as possible. Keeping track of your objectives and progress can help you solidify them and help you see how minor improvements build up over time towards achieving your goals.

Some basic yet powerful tips include:

Taking Care of Debt

It's easy to get into debt, especially if you're having financial difficulties. If your goal is to eliminate debt, first understand the type of debt you have and start by getting those high interest debts cleared up. In most cases, you'll want to pay off your credit cards first rather than your mortgage as credit cards carry the higher interest charges.

To begin, figure out what your credit card interest rates are and write them down. This will help you decide where you want to deposit the money first.

Apply the same logic to your student loan debt, which is a massive priority in India. Either way, just remember to begin by increasing your payments on your higher-interest loans.

Investing

Despite the pandemic's economic instability, the stock market reached new highs in 2021, with the NIFTY and Sensex yielding significant gains and successful IPOs flooding the market.

If you want to begin investing, make sure you first have a firm grasp on your financial situation. This relates to understanding your spending, savings, and taxes.

Once you've determined how much money you have to invest, then you can start to put a plan together or speak to a financial professional who can put an investment plan together for you. It’s a New Year, let’s do it right – everyone’s financial situation is different, as such, your investment portfolio likely won’t be the same as your co-worker’s or your neighbor’s portfolio. Just because they are investing in crypto currencies doesn’t mean that is the right long-term plan for you.

There are various online services accessible, including lessons on online broker websites, but as outlined above, you can contact a financial adviser for long-term or even short-term assistance.

Cutting Back

Some individuals like to go full out, such as imposing spending freezes on all except the essential items. Others, on the other hand, may find this overwhelming.

Keeping track of your expenditures may make a significant impact. Consider only using one credit card while purchasing online to make things easier. Keep track of your subscription services as well, maybe with the use of a spreadsheet. You can get rid of the ones you don't need. This is important as it’s easy to overlook the recurring costs that appear on your monthly accounts but paying attention to them may make a big impact.

Reap Benefits of Employee Perks

Several employers offer employee stock options, insurance, or pension plans; some long-term employers sponsor your child’s education and provide healthcare as well. Thus, taking advantage of these is imperative.

It’ll help you out even more, when you invest in your pension plan. This will give you more financial freedom and the choice of investing your pension fund in your desired investment instrument.

Save!

As the pandemic has shown millions around the world, a healthy savings plan can help minimize large financial shocks such as a global shut down.

Take a look at how your spending has evolved. Instead of spending that money, put it aside if you no longer commute to work. The money you save by eating at home rather than going out is the same. The objective is just to get started, even if it's a modest amount. Savings can be made more accessible by automating them.

And lastly, don't be too hard on yourself if you stray off track. At the same time, celebrate your achievements. This will help you stay on track and keep you and your family motivated!

Things happen in life, understand it, learn from it and apply that knowledge to your updated plan. Just don't get disheartened if things don't go as planned; remember that even modest measures might add up to a significant impact. Over time, your perseverance will pay off.

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund

All investors have to go through a one-time KYC (Know Your Customer) process. Investors to invest only with SEBI registered Mutual Funds. For further information on KYC, list of SEBI registered Mutual Funds and redressal of complaints including details about SEBI SCORES portal, visit link : https://mutualfund.adityabirlacapital.com/Investor-Education/education/kyc-and-redressal for further details.

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