3 tips for creating a worry-free financial life

We don't have control neither over others' lives nor on natural calamities. External factors keep affecting us and many times, can deteriorate our financial life. So, being financially literate is really important for everyone. Reason being, financial literacy would help you to live a worry-free financial life so that your finances don't get affected easily by external disturbances. Generally, people take advices from their financial advisors but we will discuss some of the tips that can help you create a worry-free financial life. It is to be noted that these tips are generic in nature, so, do consult your financial advisor.

Saving
Golden rule says that you should save first and spend later. It is wise to at least keep 10 to 20 per cent of your income for savings. However, people do exactly the opposite. They first spend and then save the remaining amount. Saving first helps you to avoid unnecessary spending. You will be able to have a control over your budget.

Investing
Just saving won’t help you to create wealth and fulfill your financial goals as money parked in saving account doesn’t even beat general inflation. So, apart from saving, it is important to invest that saved money into various investment vehicles depending upon your risk profile and financial goals. It is better to invest even a minimal amount monthly for your retirement, right from your first job.

Goal-based investment
There are people who prefer to invest directly without linking those investments to their financial goals. But goal-based investment has its own merits. These investments based on your goals have great benefits – they help you to manage the risks better, assure fund saved for your goals to be fulfilled in future, make you more focused and disciplined while investing etc. So, it is important to link your investments to your financial goals. However, you can consider direct investing, without linking it to your financial goals, only when you have provisioned for all your needs and are adequately insured. Goal-based investments would help you to have a dedicated asset allocation depending upon your risk profile and your financial goals. So, this helps you to achieve your financial goals at a micro level.