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WHAT IMPROVEMENTS YOU CAN MAKE IN YOUR FINANCES IN 2021?

Posted on Wednesday January 27th, 2021

Nowadays, finance is one of the most significant aspects of every individual’s life that includes managing the finances, achieving financial goals, fulfilling financial requirements, family security, investments for retirement and last but not the least is saving. All these aspects depend upon one’s income, expenses, lifestyle and financial priorities but to achieve all this, you need one common thing i.e. financial planning. If you are already working on it and still can’t see any noticeable change then it’s high time to rectify your mistakes and layout the financial planning once again in 2021 to see your money growing.

Here are some of the corrections that you should make in your finances:

♦ Don’t let your money lie in savings: It is very common among people that they let their money lie in their savings account and proud of that which makes no sense at all. The fact is that money can’t grow sitting idle in savings account as it loses its value as inflation rates are higher than the interest it makes. If you invest your savings in other portfolios it can give you higher returns than interest rates give you annually. Keep in mind to choose your investment plan properly, as wrong decision can end up in loss.

♦ Plan a budget for investment: Till the time, you might have heard about laying out a monthly budget but to reach financial success, it is very important to plan an investment budget and it starts with evaluating your monthly expenses and savings. Always create an investment budget in such a way that the maximum saved funds are used to create more wealth. Ensure yourself not to invest all your savings as you may need some of them in emergency situations.

♦ Never get tempted by stock market: However the stock market yields biggest returns but it is advisable not to invest all your funds there because it can be quite risky sometimes which can cause you a huge loss. Therefore, to be on safer side, you should invest a minimum amount even after doing proper research. You should never get tempted to see others profit as most of the losses go unnoticed.

♦ Do a proper research and understand: Anyone who is a beginner, they shall take a time to learn about investment and its profits and losses. One should search for better investment options as per their requirement and investing capabilities. Many people are willing to invest but are unaware of using the funds in right way. Thus, before investing in any plan, it is crucial to know the performance of that portfolio in past years, offered interest, risk tolerance and investment amount allowed under that plan. It is always good to keep in mind the future scenarios and present requirements before starting the investment.

Hence, it is important to analyze your finances before planning your investment. Making an investment budget is one of the starting steps which every individual should include in their financial planning to reap maximum benefits. Never invest your money in one place and try to diversify your investment for better results.


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ALL ABOUT THE EMI AND ITS CALCULATION

Posted on Wednesday August 26th, 2020

In recent times, prices are hiking day by day and it’s impossible to make any big purchase without a loan. However, getting a loan these days has become much easier and turns out to be useful in the right circumstances. Before you approach any lending institution for loan, it’s advisable to know about the basics of borrowing so that you don’t regret your decision later. An EMI is a key factor of any loan, so we are going to tell you all about the EMI and its calculation. The term EMI means for equated monthly installment which is a fixed amount of money, you need to pay your lender as a repayment towards your loan until your loan is fully repaid.

An EMI is nothing but a loan feature that allows you to borrow money for emergency use while letting you to repay it in installments over an extended period of time. It is paid to the lender on a fixed date every month by setting up auto debit system or via cheque through your bank. There are two main components of EMI, the principal amount and the interest component on it. In initial years of loan after you Apply For Loan huge portion of monthly installment consists of interest but as the loan matures, the outstanding loan quantum reduces gradually and the interest part becomes lower than the principal amount. The EMI amount also gets changed in the following cases:

Prepayment of Loan: If someone prepays the loan money during the tenure of loan, EMI will change accordingly. The prepayment cuts down on principal amount, therefore interest will be charged on new principal amount now. You can also ask the lender to change the tenure instead of EMI which leads you to repay the loan money quickly.

Progressive EMIs: Some of the lending institutions also offer the option of repaying the quantum through progressive EMIs. In this case, you initially pay a limited amount for specific time and after completion of this period, you start paying larger installments. It is generally preferred by the individuals who just started their career and cannot afford large EMIs initially but hope to pay it as they grow in their work place.

There is a particular mathematical formula to calculate an EMI which is given below:
P x r x (1+r) ^n/ ((1+r) ^n-1), where P stand for principal amount, r stands for rate of interest and n stands for duration of loan in terms of month. Nowadays, banks and non- banking financial institutions are offering use of free online calculators on their official websites when you Apply For Loan Online. These calculators can help you to know how much installment you need to pay each month so that you can plan your budget accordingly. It should be a prior thing in your checklist while securing a loan to calculate EMI beforehand to stay out of debt forever. Hence, you know all about EMI now, go ahead and choose the loan that suits your needs.