Christmas and Finance – How to get MORE Goodies from Santa!
If the festive season usually leaves you out of pocket and feeling like you spent more time and money. Here are 5 ways to plan a fun Christmas:
- Eliminate credit card debt
If you use a credit card, try to ensure that you pay off the balance in full when the bill arrives. Generally, credit cards are an expensive way to borrow money that they generally have higher interest rates. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in “default”. The late payment penalty itself increases the amount of debt the consumer has.
- Prioritize savings
Learning to save it can be difficult. But, the most difficult aspect of it is getting started. If you periodically save at least 10-15% of your income, it will become a habit. And over time, it will accumulate substantially. You need to put that money to work if you want to create wealth. Equity offers great potential to convert your savings into wealth. And you can start with very small amounts too.
- Build your credit score
Your credit score is an important financial factor that shows creditors how healthy your finances are. Good credit scores range from 700-749, and scores of 750 and higher are considered excellent.
Building a healthy credit score can take time, but there are some simple steps you can take to start on the path to good credit things such as paying your bills on time and keeping your utilization low.
- Buy Term Life Insurance Online
Online plans are cheaper as they don’t pay anything as commission to the agents. Term insurance is a pure life insurance product, which provides financial protection in case of death of the life insured during the term of the policy. A term insurance plan is the most affordable form of life insurance cover. It is designed to financially protect ones family in case of death of the bread-earner.
- Prioritize tax planning
Tax planning is more than Section 80C. It is more than fixed income instruments such as the Public Provident Fund, or PPF, and the National Savings Certificate, or NSC. Good tax management can go a long way toward enhancing your return. But, the decision needs to be made in conjunction with your overall portfolio and not in an ad-hoc fashion. For instance, if you have no equity exposure in your portfolio, you should consider an equity linked savings scheme, or ELSS, which is an equity mutual fund that offers benefits under Section 80C.
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