Planning a Vacation? Here are some Financial Tips to Help you

Summers may entail tolerating the scorching heat but it is also the period when most families look forward to their ‘summer vacation’ where they travel to different places and spend memorable time with their loved ones. We often don’t think twice while spending for such vacations since it’s a much-needed break. However, if developed sensibly, you can easily plan a fun holiday within your budget and moreover end up saving too.

Given below are some financial planning tips for a vacation:

1. Plan in advance:

Last minute planning can prove to be a costly affair since travel fares and hotel tariffs largely increase during summers. You can save a lot of money if you plan beforehand.

2. Work out the various costs:

Once your destination is decided and the tickets are booked, the next important step is to understand the expenditure which will be incurred during the course of the journey such as sight-seeing expenses, meals, transport charges, souvenirs to be taken, shopping etc. Make sure you have adequate funds to take care of these outflows.

3. Begin saving beforehand for your journey:

After you have calculated the cost of the total trip, determine how much you need to save in order to pay the amount comfortably. For example, if the cost of your vacation is Rs. 50,000 and if you have 5 months before you leave, make sure you save Rs.10,000 every month. This could mean not going out for fancy dinners often or keeping some luxury purchases on hold but it’ll be worth the effort.

4. Keep unforeseen expenses in mind:

When you create a budget for your vacation, place some cash aside to take care of emergencies that might occur during the journey. It could include losing your baggage and shopping for spare clothes, doctor expenses in case of any family member being injured, spending an extra night at the hotel due to train/flight delays etc.

5. Be aware of credit card/debit card charges:

At times, card firms might impose additional charges on credit/debit cards especially when they are used in a foreign country. It’s recommended to carry some cash instead of being completely dependent on cards.

Summer vacation trips are the best time to relax, bond with your family and create precious memories. Don’t let shortage of funds ruin your outing. Make a proper financial plan so that you enjoy every moment instead of worrying about the expenditure.

Break the Boundaries of Investing

Many a similarity exists between Cricket and Investing. The most important amongst them being strategy and a long-term view. In a quick-paced format likeTwenty20, strategy is key along with careful planning and patience. Here are 11 ways you could get the best from your investments just like the twenty 20 matches, and play a strong innings.

1. Physical fitness = Investor awareness

Just as a player’s performance depends on his fitness, an investor’s awareness is what Helps him decide which investments to make. An informed investor won’t follow the Herd or be swayed by hearsay. It pays to do your research before making any decisions. And when in doubt, always consult a professional on what course of action to take.

2. Team selection = Asset allocation

Like a cricket team is made up of diverse players like fast and spin bowlers, batsmen, wicket Keepers, etc. your portfolio too needs the right mix of asset classes from equity, debt, cash and Gold to name a few. A fast bowler is similar to an equity fund. An all-rounder, like a balanced fund. But the important thing is to get the right mix of players to build a strong team. It’s the same with your investments. So while making an investment, make sure you have the right mix of asset classes to ensure that your portfolio won’t be affected by a sudden fall in any one asset class.

3. Game plan = Risk appetite

Every batsman thinks before taking a single or slugging a six and every ball that’s bowled is carefully timed and dispatched to gain maximum advantage. Just as a player assesses his risk before playing, you too need to make the right preparations before investing. Determine your risk profile to decide how much to allocate in each asset class and whether the time is suitable to play hard or play safe.

4. Winning the Toss = A good start

The toss plays a significant role and ensures a good start. In investing, an early start is a good start because your money gets more time to grow and benefit from compounding. So seize the moment and start right away to give your money the benefit of time. You will realize that it could be your winning decision in the long term.

5. Role of a coach = Professional management

A coach brings a wealth of knowledge, experience and expertise to the field. Fund Managers play a similar role in investing. Using in-depth research and proprietary tools, they analyze every single stock or debt instrument before investing to help drive the performance of the scheme. Professional management is the hallmark of every mutual fund investment.

6. Taking singles = Systematic investing

Every run adds up. And that holds true for your investments as well through systematic investing. Monthly investments are like taking singles, they ensure your scoreboard keeps ticking. While intermediate lump sum investments could be compared to the occasional boundary, the discipline of systematic investing could result in a great score over time.

7. Power play = Maximizing returns

In every match there are those overs where the batsmen aim to maximize runs in power play by smashing fours and sixes. Similarly in investing, there are times when an investor could look to maximize the growth of his investment. It could be as simple as entering the markets through an equity fund in a bear phase to cash in for the long term. Think of it as hitting a four or even a six by making your investment at the right time

8. Wickets falling = Time for review

There are times when even the best batsmen get out and the best bowlers go wicket-less. A similar situation could occur with your investments. At such times, relook at your portfolio and seek professional help before making any changes to ensure long-term growth.

9. Under pressure = Stay invested

Even the best batsman knows when to play safe and when to strike. Similarly in investing, while most investors panic when the markets are volatile, you need to hold on to your investments until you reach your goal. But the best strategy is time. So as long as your long-term goals haven’t changed, stay invested and don’t let the cheers of the crowd change your mind investment.

10. Score and statistics = Goal review

For a team batting second, what matters is run rate, required rate, projections and more. Your investment portfolio too, should be treated similarly and kept a close watch on. Periodic checks and reviews of each fund’s performance against standard benchmarks and peers determine how it has fared over time.

11. Player rankings = Individual performance

Every player is rated on the basis of his skill to secure a position in the global rankings. Likewise in investing, funds are ranked on the basis of their performance track record and history. It pays to do your homework and study the right kind of funds before making any investment.

4 Smart Money Management Guidelines for Women

It is a known fact that women are brilliant when it comes to multi-tasking; they balance their careers and home impeccably and excel in vital roles including those of a loving wife and hands-on mother. They take care of office responsibilities and at the same time ensure that family commitments are fulfilled too. However, when it comes to managing personal finances, majority of women are not proactive and leave the decisions to their male counterparts.

Financial planning should form an essential part of every woman’s priorities. We present 4 smart money tips which can help females secure their future financially:

1. Understand Finances:

The first step for ladies towards successful financial management is to educate themselves about the different aspects of money. Have a financial date with your husband once every month to develop a viable budget. Start getting familiar with different investment vehicles and figure out how you can benefit from them. Discuss various retirement options. The more you involve yourself in the process, the more confident you will feel about dealing with finances on your own.

2. Make a will:

As per Hindu Succession Act, if a married Hindu female passes away without leaving a will, all her assets directly go to her spouse, children and grandchildren if any. If you always wanted to preserve some cash for your aged parents or donate funds to a cause you support in the event of your death, it cannot happen unless you have a will which clearly states your wishes.

3. Opt for life plus health cover:

Women have a higher life expectancy than men which makes it imperative for them to take sufficient life insurance plus mediclaim. Do thorough research on the different life policies available and choose one that takes care of all your needs i.e. basic requirements, child’s education, other liabilities such as loans. Health insurance is equally important to pay for treatment and various medical expenses that can arise on account of illnesses.

4. Include maternity insurance in your health policy:

Motherhood gives immense joy but it also involves several costs such as regular visits to the gynaecologist, tests, delivery procedure and subsequent hospital stay which can increase financial burden for women. Taking maternity insurance is the ideal option to handle these expenses effectively. It has to be taken as an add-on with your health insurance cover.

Initially, women who are not in control of their finances might find it difficult to step out of their comfort zone. But once they are aware about money matters, it’ll take them little time to become an expert and most importantly give their morale a huge boost.