Smart money moves to make in 2022

2020 and 2021 have been a roller coaster year for many people. Whether it was braving the second wave or finding your footing post the economically turbulent 2020, this year was a milestone year in more ways than one. As 2021 ends and 2022 draws close, it may be best to plan ahead. A sound financial plan for 2022 can help you start a better financial journey on the right note. Here are some smart money moves you can make right now as you walk through 2022:

Tune-up Your Stock Portfolio
 

The year-end can be the perfect time to rebalance your portfolio. Try to keep a suitable combination of different assets classes–stocks, bonds and cash that align with your goals and risk appetite. You can also review the performance of your portfolio in the last year and see how it has fared against a volatile market. This can help you make better decisions for the future. It can also help to keep a well-diversified stock portfolio to cut risk and maximise the potential for high returns. So, if one sector goes down, the other one helps your recover. You may consult a professional financial advisor for more details and guidance.

Pay Attention to Your Retirement Savings
 

Retirement planning is a long-term process, one for which you must start preparing from the very beginning of your career. Retirement planning includes saving and investing for your post-retirement years. This can be done by investing in mutual funds, stocks, bonds, traditional retirement accounts like the National Pension Scheme (NPS), Public Provident Fund (PPF), etc. You can also have multiple savings bank accounts and dedicate one to your retirement needs. However, make sure to pick a bank with a high-interest rate so you can beat inflation too. In addition to this, you must also plan for your health expenses by purchasing a good health insurance policy. After all, health expenses can be a heavy financial burden when you are retired. So, it is crucial not to neglect health insurance. Retirement planning can be an intricate task, but it is essential.

Remember Credit Card Rewards
 

Credit card rewards can boost your savings further. These rewards are added to your account every time you use your credit card to make a purchase. You can then redeem these points on your next purchase or when you clear your credit card dues. You can also use them to pay the annual fee of your credit card. They help you earn back every time you make a spend. IDFC FIRST Bank Credit Cards offer 10x reward points which can be redeemed anytime.

Strategise to Pay Loans Faster
 

Of all the smart money moves you make this year, it may be beneficial to prioritise settling debt first. High-interest debt can drill a hole in your pocket sooner than you think. But there are some ways to lower your liabilities. The first is by opting for a balance transfer on your credit card. Some credit cards offer low interest during the introductory period. You can transfer your high-interest debt to a low-interest credit card and pay back the money more efficiently. Credit cards provide the convenience of EMIs or equated monthly instalments that ease your financial burden. This also reduces your payable amount, as the total sum gets distributed to several smaller payments. Moreover, when you use a credit card to pay your dues on time, you improve your CIBIL score. This makes it easier to get a low-interest loan in the future. Another way to pay back your debt sooner is to invest more. You can invest in short-term instruments and use your earnings to speed up your debt settlements.

Maintain an Emergency Fund
 

Keeping the events of this year and the one before in mind, an emergency fund is vital. You can park at least six to eight months of your expenses in a savings account. This can be used if you encounter an urgent financial need due to a loss of job, a health crisis, etc. The IDFC FIRST Bank Savings Account may be ideal for this. This savings account offers an interest of 5% per annum. So, not only do you save your money, but your funds also grow with time.

To Sum It Up
 

These smart money moves can help you secure the next year financially. So, make sure to follow and implement them wisely.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.