Still Not Clear About Your Financial Plans? What’s Best to Take Steps this New Year

Every new year you make resolutions to eat healthy and exercise regularly but do they go as you think? So, this new year take an all-new approach and give yourself a promise to start your investment and financial journey. We often hear that “health is wealth” and it is ideally true. In reality, investing and wealth creation should not be considered secondary because “A penny saved is a penny earned.”

In this blog, we’ll cover all the steps you need to take after partying hard and then bringing 2025 with strong financial plans. Now, all your dreams that are not fulfilled yet are set to be achieved this new year.

2025: A New Start to Your Financial Journey

Money lying idle in your bank account, unclear tax-saving plans, and no insurance in hand are the red signs and can really affect you in the long run. So, it’s better to kickstart your financial plans and investment journey from 2025 and not delay it any further.

1. Invest in Stocks and Mutual Funds

The very first step you need to take is to start investing in stocks and mutual funds regularly. Saving money in your bank account and starting an FD can be a good idea. But when inflation is soaring to high levels in India, these old ways of saving money cannot keep up your wealth with the real value.

Stocks and equity mutual funds, though might be more risky but can adjust your savings to real value. If you do not want to take a risk of a huge amount, then you can start with small amounts and invest in mutual funds through the monthly SIP of ₹100 or ₹500.

In stocks as well, you can invest in upcoming sectors such as renewable energy, electric vehicles, fintech, and slightly stable FMCG stocks to have a view of the market and earn inflation-beating returns in the long run.

2. Take a Long-term Approach

Meeting short-term goals like buying a smartphone or going for a short trip can be easy. However, fulfilling long-term goals such as buying a house, funding your child’s education, and relaxing in retirement age can be difficult if you are not investing today.

These goals require strategic planning and you also need to invest with a long-term vision. Through the power of compounding, your invested money can multiply by many folds. You will get the returns not just on your investment amount but also on past returns.

3. Be Ready to Face any Emergency

Investments should be done in such a way that you have ideal money in your hand to face any emergency. Parking all your funds in the longer lock-in instruments is not really the ideal scenario. Keeping at least 3 to 6 months’ worth of expenses in an accessible way is indeed required.

Liquid funds, a type of debt mutual fund, can help you invest the money for shorter periods from 1 day to 3 months. These mutual funds can be redeemed easily and are also less risky and at the same time, you can also earn some returns.

4. Keep your EMIs in Check

Investment can make your money grow but at the same time, high interest debt can make your plans go off the track. Keeping a check on your EMIs and credit card bills is certainly very important.

Credit card interest rates are generally at a high of 36% and that’s why it’s better you prepare your monthly budget after deducting these EMIs. It’s better to consolidate all your loan details in one place and keep track of them. Always try to pay the high-interest rate loan first and pre-pay your loans if you have a surplus in hand.

5. Insurance is a Must

There are times when things cannot go as planned and that is where life and health insurance helps. Covering yourself and your family members with life and health insurance helps in meeting any unforeseen circumstances.

Health-related expenses are rising like crazy and if you don’t have insurance then it can surely strain your finances. If you still have not taken any insurance, then what’s better to do in 2025 and secure your loved ones’ future.

6. Optimize your Tax-Saving Strategy

Investments and tax savings actually go hand in hand and you can plan your investments in such a way that it helps you save taxes. Consider the Section 80C instruments like ELSS mutual funds, PPF, ULIPs, NPS, etc., and deduct your taxable income every year by ₹1.5 lakhs.

Health insurance premiums up to ₹25,000 for individuals also allow you to save taxes in Section 80D. So, both investments and insurance can help you reduce your tax liability and you have more money to spend.

7. Explore New Investment Avenues

Diversification is a key to reducing the unsystematic risk by spreading your investments across mutual funds, and stocks. But there are many more instruments that you can explore this new year and invest in to reduce the risk.

There are Sovereign Gold Bonds that can give you assured returns without the hassle of holding physical gold. There are ETFs and index funds that can give you returns based on some underlying index performance like Nifty 50 or Sensex. All such instruments can expand the scope of your portfolio and help in creating a better risk-return balance.

8. Rebalance your Portfolio

Investing and analyzing is a continuous process and so is rebalancing your portfolio. You should rebalance your portfolio from time to time and check which instrument is performing well.

You can consider adjusting your portfolio according to the current market conditions. The equity-debt allocation of your portfolio should be aligned with your risk tolerance and return goals.

Ending Note

2024 is coming to an end and we are all set to bring in 2025 with all new resolutions of financial joy. This new year, we should certainly take a step towards savings, investments, and creating a robust portfolio. A well-structured investment plan can help you meet your goals and secure your loved ones’ future.

But before 2024 ends, you should take the very first step of starting an investment so that 2025 starts with a smooth ride. Open Demat account with SMC Global Securities now and bring in the new year with no stress.

Author: All Content is verified by SMC Global Securities.