Navratri and Nine steps to achieve your financial Freedom

Economics   13 October 2021 12:03:AM

Festivals are the time when we relook at our lives. Festivals are also the time when we restart our lives with renewed hope and faith. One of the important things, which provides a blanket of security, is ensuring that what you earn is saved or invested enough to serve you well in the future.  

Recently, the world celebrated financial planning day on October 6. Now, we are celebrating the Navaratri. These nine nights of worshipping Goddess Durga are celebrating the various facets of kindness-personified Goddess Durga. But it is also a period of self-reflection and self-correction. It is time to do proper financial planning as we come out slowly from the firm grip of the Coronavirus.   

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Keeping this in mind, let us understand nine steps towards your financial planning that bring financial freedom to our life. These steps can serve you well each night as you reflect on your finances:

Start saving

Save as you earn. Instead of Income – expense = saving

You should start practicing Income – saving = expense

To put it simply, instead of saving whatever is left, consciously keep aside a fixed sum of money each month. You can simply park it in a liquid fund or a short-term fixed deposit if you are not sure where you want to invest it. Money stashed aside in such short-term liquid investment products can be invested for the long-term with a view to creating a large corpus. Saving is akin to seeds and wealth is akin to a tree that came out of those seeds. Start saving early and target a certain level of saving.

Decide on your financial goals

Clearly define what you want. Let it be - your retirement 25 years later or a vacation overseas five years from now. You should know how much it takes to pay for it at that time. Do account for inflation. You can use an online calculator {link to calculator}.

Once you know your financial goals, then you can plan to achieve them better.

Asset Allocation

You must figure out an ideal asset allocation for your financial goals. You have to start saving for each of your financial goals separately. If a goal is long-term, you can allocate more money to stocks and if your goal is short-term, maybe the next year, you should be saving money in fixed deposits. An asset allocation works as a compass that gives you direction.

Earlier you start investing more time you get to invest and compound your money.

Asset rebalancing

When you start investing in line with your asset allocation at regular intervals, it helps you to create a corpus. But your asset allocation may drift due to market movements and may not remain as effective as it should be for your financial goals. Rebalancing asset allocation by selling an asset class that has done well leads to rule-based profit booking. This ensures that you keep going closer to your financial goal.


Best asset allocation need not necessarily produce desired results. Asset allocation has to be rebalanced. Whenever you have invested across asset classes, you have to ensure that your investments should have some interim liquidity. Not all investments are liquid. Some of them have high-cost implications if you sell early. Hence instead of focusing on returns, it makes sense to consider interim liquidity too. If investments are liquid in nature, then corrective actions can be taken easily.

Buy Insurance

Purchase the right insurance cover when you are earning. Insurance does not make good of emotional losses and trauma, in case of loss of life or accident or hospitalization. But it makes a good financial loss. It saves your investments being spent on such things. Buy adequate personal accident insurance and health insurance {link} for yourself and your family. In case of premature death, term life insurance cover pays survivors and families’ financial goals—such as children’s education and spouse’s retirement are taken care of.

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Borrow smart

Today, the option for loans has become a part of our lives. Sometimes we borrow for our dream car. Sometimes we borrow to buy a bigger house. We may not have enough time to save, invest and build a corpus to buy things. In those cases, loans come to our help. But be prudent while borrowing. As far as possible avoid taking high-cost personal loans. Education loans and housing loans are considered good loans if you manage to pay them off on time. If you are going for a big loan, do not forget to buy adequate life insurance. Making your family pay your loan is the last thing you want when you are not around.

Make a will

When you invest and accumulate assets, ensure that you pass them on to a person or purpose of your choice. A well-written Will can help you do so. It ensures that your family members and your loved ones get to enjoy your assets without any trouble.

Financial advisor

If all these things look too difficult for you hire a professional. Seek financial advice wherever required. A professional touch not only improves your chance of achieving financial freedom but also makes your journey to financial freedom stress-free.

Just as Dandiya in Navarathri is all about sharing joy, it is equally important to have a friend with whom you can share your financial goals and who can help you achieve them. And that friend can be a financial advisor.

Bearing these aspects in mind, let us start our journey towards achieving our financial goals with utmost confidence and faith.

If you have already prepared a financial plan or are in the process of preparing one, do invite a friend to avail of financial planning services. 

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