Financial Planning for newly married
Financial Planning for the newly married !
Planning investments as newly married individuals in India requires a thoughtful approach that considers the unique characteristics of the Indian financial landscape. Our traditions play a significant role in shaping our investment journey. Additionally, the influence of social media and the weight of traditional investment practices can guide our path towards making informed investment decisions. It is important to blend our cultural values with modern investment strategies to create a balanced portfolio that aligns with our financial goals. By embracing the strengths of our cultural heritage and leveraging the opportunities presented by evolving investment trends, newly married couples in India can navigate their investment journey with confidence and achieve long-term financial success.
Here are some key points to help you plan your investments effectively:
Define financial goals
As newlyweds, it is important to start by setting clear financial goals together. Focus on short-term objectives such as building an emergency fund, saving for a down payment on a home, or planning a special vacation. Alongside these immediate goals, consider laying the groundwork for future financial stability by setting aside funds for retirement, ensuring your children’s education, or even creating wealth over time. By setting specific and achievable goals, you can guide your investment decisions and work towards realizing these milestones together.
Remember, finding a balance between short-term gratification and long-term financial security is key as you embark on this exciting journey as a newly married couple.
Budgeting and savings
Create a budget that outlines your income, expenses, and savings. Ensure that you allocate a portion of your income towards savings and investments. Aim to save at least 20% of your income, and avoid unnecessary expenses to generate surplus funds for investments.
“A budget is telling your money where to go instead of wondering where it went.” - Dave Ramsey
Emergency fund
Build an emergency fund to cover unexpected expenses. Aim to save three to six months’ worth of living expenses in a liquid and easily accessible account. This fund acts as a safety net during financial emergencies, preventing you from dipping into your investments.
Understand tax benefits
Familiarize yourself with tax-saving investment options available in India, such as Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), National Pension Scheme (NPS), and tax-saving fixed deposits. These investments not only provide tax benefits but also facilitate long-term wealth accumulation.
Diversify your portfolio
Diversification is key to managing risk. Allocate your investments across different asset classes like equity, debt, real estate, and gold. Mutual funds can be an effective way to diversify your portfolio as they offer access to professional management and a range of investment options. Understand risk factor of each instrument from safest Government bond to the riskiest cryptocurrency or any other instrument.
Stay informed
Keep yourself updated about various investment avenues in India, including their risks, returns, and tax implications. Stay informed about market trends, economic developments, and changes in regulations that may impact your investments. Regularly educate yourself to make informed investment decisions.
Seek professional advice
Consider consulting with a qualified financial advisor who can understand your goals, risk appetite, and investment horizon. They can provide personalized advice, help you select suitable investment options, and assist in periodically reviewing your portfolio.
Regular review and adjustments
Periodically review your investment portfolio to assess its performance and alignment with your goals. Make necessary adjustments based on changing market conditions or shifts in your financial situation. Regularly rebalance your portfolio to maintain the desired asset allocation.
Nomination
Update your nomination in all your saving instruments including FD, stocks, demat account, mutual funds etc…Nomination expedites the settlement process for financial instruments. In the event of the account holder’s death, the nominee becomes the rightful recipient and can claim the proceeds or benefits without delay. This avoids prolonged legal procedures and reduces the time and effort required to transfer ownership or access funds.
Conclusion
By adopting a systematic and informed approach, newly married couples in India can pave the way for a financially secure future. It is important to clearly define your financial goals and align your investment decisions accordingly. Diversify your investments across different asset classes to spread risk and maximize returns. Seek professional guidance from qualified advisors to make informed choices. Stay committed to your investment strategy, maintain discipline, and exercise patience as you work towards achieving your financial aspirations as a newly married couple in India.
“Set shared financial goals and work together to achieve them. A united front is key to financial success.”
