5 things you should do to maximize your earnings this financial year
Its April. It’s a new financial year. You will read loads of articles about filing tax returns. While it is important to file returns, and close your tax liabilities/ claim refunds, it is even more important to plan your finances wisely for the new year. You must ensure that your money works as hard as you and get your maximum returns. I have a list of 5 things that could help you in this regard:
Start Investing in Equity: The Rajiv Gandhi Equity Savings Scheme (RGESS) enables first time investors in the stock market to claim a deduction of 50% of the amount invested in Equity. The maximum amount on which this deduction can be claimed is 50%. India is poised to be the world’s fastest growing economy. The stock markets are true barometers of the economy and is expected to do well this year. If you participate in the growth story, you are likely to reap good returns which would be much more than fixed deposits and debt funds, as per analysts and stock market experts. So, get some good advice and park some money in stock markets this year.
Increase the amount invested in SIP: If you have already invested in an SIP, consider increasing the amount. India is a growth story and is anticipating a bull run. Hence, it makes sense to invest a little more in a good mutual fund and get more return on the money invested. If you haven’t invested in Equity Linked Saving Scheme (ELSS) or a similar mutual fund, it may be the opportune time to do so.
Repay a part of your home loan/ any other loan: For people with a home loan, it is wise to repay a certain sum in April itself and ask your bank/ loan provider to lower your interest rate if it is not corresponding to the current market rate. This will help you to reduce the outgo towards interest and enjoy this benefit right through the year. The amount saved can be wisely invested to get more value from the money.
Make payments for the year, review plans: Whether it is society maintenance charges or charges for DTH or internet, if you pay for the entire year, you get a discount. For example: DTH and internet service providers often give you a month of service free if you pay for the entire year at once. And, since the amount would be in the range of 5 to 10 thousand rupees for the year, it is not a bad idea to get more value with the same amount of money. Also, with a lot of offerings available across multiple service providers, you can check for the ideal plans available out there to reduce your outgo for such services. For example: If a certain mobile service provider is giving you excellent voice and data services at significantly lower cost, you can switch to the new service provider while retaining your existing mobile number and save money in the process. This money can be invested in SIPs to ensure that you get more value out of this as well.
Rejig your investments and park your money in better return yielding avenues: If you have invested most of your money in fixed deposits (FDs), it will yield lesser return this year as compared to the last few years. The reason being that the interest rate offered by banks on FDs has reduced
significantly. Even worse is the fact that most people have a lot of money lying idle in their savings account. It is thus important to consider removing the money from some of these investments and parking it in higher yielding equity / mutual funds. If you think these are risky avenues, there are debt funds which can also yield a much higher return than FDs.
This financial year, make your money work harder for you and invest in the right avenues to help you maximize your earnings and save better for a rainy day.