Shopping vs Investing: What should be your focus heading into 2022?

It is essential to strike a balance between planning your finances and making the most of the festive season

Anyone who said that money cannot buy happiness is wrong. Swiping your credit card and purchasing a luxury item for yourself can bring in a unique joy in itself! Of course, you shouldn't use your credit card to buy everything your heart wants. When it comes to transactions, there is a distinction to be made between 'shopping' and 'investing’, especially during festivals. When you go shopping and purchase whatever your heart desires, you return home with a dent in your pocket. You may then begin to question whether you made the best decision with your money. This question may pop up in your head even more often during the festival season when prices rise, and the shopping list seems to never end.

Here are some pointers that pit shopping vs investing which may help you make a decision. 

Festival shopping or investing: What’s the better choice?

While festival shopping can bring you much joy, it will offer only a momentary sense of happiness. Once the festival season gets over, the things you have spent your money on will, in all probability, occupy space in your house until they’re needed. Spending your money shopping during the festival season, in most instances, does not usually bring you much returns. But if you take the money you put aside for shopping and find a way to invest it, you can get huge returns that can help you and your family later on in life. Investing may not bring you instant gratification as shopping does, but you can be sure that you will not regret putting aside the money at some point in your life.

Given below are some tips on how to make a good investment during this festive season. 

How to make a good investment?

Here are some points to help you make the right investment decision amid the festive buzz:

Strict to an investment strategy

A disciplined investing technique helps ensure that you attain your objectives with ease without letting your emotions affect your decisions. No matter how the market is, those who invest in a disciplined manner seldom suffer. Investing in what you understand, resisting herd mentality, sticking on to your savings for the long run, and not timing the market, are all part of a disciplined investing strategy. Calculate your risk tolerance and make investments accordingly. Do not be fooled by short-term volatility. Keep an eye on your portfolio to fill in any gaps. Know what the best savings account or best growth fund for you is and stick to these options.

Diversify

Diversification is one of the most powerful financial strategies, as it ensures that your money is dispersed across several asset classes. It gives your portfolio the appropriate balance and guarantees that your profits are protected during downturns in the economy. You may simply diversify your portfolio by investing in shares, fixed-income instruments, gold, as well as real estate, to guarantee that deficits in one asset class are offset by gains in another.

Invest in mutual funds

Mutual funds do not require an introduction. They are one of the most sought-after asset groups as they help you systematically and consistently create wealth while also providing diversification. They can be an excellent investment vehicle for long-term goals, such as your children's education, weddings, and retirement.

Get an insurance

Insurance, the cornerstone of personal finance, protects you financially in the event of a disaster and ensures that your family is not left in the dark. A pure term insurance policy provides a significant cushion at a reasonable cost. It is a wise method to guarantee the future of your family in your absence.

We trust you have a better understanding of how you can make a prudent investment during this festive season. One of the most commonly opted for investments is a savings bank account. If you want to open an instant bank account with the best bank savings interest rates-, you have come to the right place. IDFC FIRST Bank offers banking and investment options tailored to customers and their needs. Get in touch with us to start your investment journey today.

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.