June 6, 2018
Yoga Day Special: 10 Financial Tips For Peace Of Mind!
We lead a fast-paced life. We are surrounded by fast cars, fast foods, high speed internet and all the luxuries at our finger tips, and yet we find ourselves waging a war against time – 24 hours in a day are just not enough. A fast track life can be very stressful and could be destructive to peace of mind. Today, on World Yoga Day, let go of stress and attain that elusive peace of mind by embracing the art of Yoga.
While you seek internal tranquillity by immersing yourself in yoga, let us take care of some financial worries that might be giving you sleepless nights. BankBazaar presents 10 financial tips for attaining peace of mind. Let’s dive in!
- Keep your Credit Card expenses under check: Credit Cards give you the power to shop at will. But, one must acknowledge that this power of shopping is accompanied by the responsibility of settling the bills later. Limit your Credit Card expenses and always pay off the balance in full. Minimum due payment will attract high interest and will only increase your debt. Avoid impulsive swiping of your Credit Card as it can lead to a huge debt which in turn will affect you, mentally.
- Pay off debts on time: Be it Credit Card bills or loan EMIs, paying off debt on or before the due date is not just good for your Credit Score but also great for your financial well-being. By paying the loan EMIs on time, you can avoid late payment fees. And by clearing off the entire Credit Card bill on time instead of just paying the minimum amount, you can avoid burning a hole in your pocket due to high interest rates. Timely payment of bills is the way to lead a worry-free financial life.
- Follow good financial habits to improve your Credit Score: If you have ever applied for credit through loans or Credit Cards, then you will know the importance of having a good Credit Score. A decent Credit Score allows you to get loans easily with lower interest rates. Since your Credit Score plays a huge role in controlling the amount of overall interest you pay, a good Credit Score is essential for peace of mind. Here are a few good financial habits to improve your Credit score:
i) Paying Credit Card bills and loan EMIs on or before the due date will improve your Credit Score over a period of time. Note that the amount should reach your bank on or before the due date.
ii) If your credit utilisation ratio is more than 20%, then increase the credit limit of your Credit Card so that your total Credit Card expenditure remains less than 20% of the credit limit, which will in turn improve your Credit Score. You could also get another Credit Card and distribute your expenses across the two but ensure that you don’t run up huge bills on either.
iii) Your Credit Score will improve immensely if you start paying the Credit Card bill in full instead of paying only the minimum amount due.
- Invest in and for the future: One of the biggest financial worries that plagues everyone is the fear of having no money for future events like your child’s education, wedding, retirement etc. The only way to stop worrying about the future is by investing in the future. Start saving for the future by investing in high yield investments such as Mutual Funds. Separate your investments based on your goals.
- Build emergency funds: A financial crisis like loss of job or medical emergencies can strike at any time. And a sense of panic and despair sets in if you don’t have enough money to sail out of troubled waters. Don’t wait for trouble to come knocking at your door and start building your emergency savings, right away. Follow a monthly budget and start allocating money for emergency funds. Having extra money in hand will work wonders for your peace of mind during emergencies.
- Buy insurance: Life is full of uncertainties. So, it is advisable to insure your life and your assets like your car, property etc. to safeguard yourself against any untoward incidents. Buying Car Insurance frees you from the financial worry of loss incurred due to a mishap or theft of the car. Investing in Life insurance assures that your family and loved ones are financially sound even after your death.
- Personal Loan Vs. Credit Card – Choose wisely: Analysing the situation in hand and choosing the right financial product to bail you out of a monetary crisis can save you from a lot of financial stress. If the amount required is huge, for example to pay a medical bill, always opt for a Personal Loan as you can repay the debt in reasonable EMIs at interest rates lower than that of a Credit Card. If the amount required is something that you can pay off in a few months, then using a 0% APR Credit Card makes perfect sense as you can clear off the debt without paying a penny towards interest.
- Protect yourself from Credit Card theft and online fraud: You must have heard the saying ‘Prevention is better than cure’. It is safe to say that protecting yourself from online fraud, Credit Card theft etc. is way better than running from pillar to post to get back the money you lost. Don’t buy products from suspicious-looking websites using Credit Cards. Do not fall prey to phishing. Cross check the authenticity of the websites’ URL. One of the best ways to know if a site is secure is to check if starts with https:// (as opposed to http://). Also, chip Credit Cards make it difficult for thieves to steal your information. They are encrypted for your safety.
- Avoid loans if you are already burdened with EMIs: If you are swamped with the EMIs of existing loans, then it is a bad idea to take a new loan as it would not only add to the burden of EMIs but might also lead to a loan payment default. And struggling to repay a mountain of debt with your monthly income or dealing with a loan default will only lead to financial stress and worries.
- Invest in tax-saving schemes: Taxes can be a headache as no one likes to see a part of their hard-earned money being deducted. But instead of fretting over the amount of salary deducted in the form of tax, it is better to take some action by investing in tax-savings schemes like Public Provident Fund, Equity Linked Savings Schemes of Mutual Funds, Fixed Deposits, etc. When you realise how much you can save by investing in tax-saving schemes, it is bound to bring you peace of mind.
So this Yoga Day, breathe in good money habits and breathe out monetary worries to attain peace of mind! Deep breath. Relax.