“We do not know what to do with our salary minus expenses, so we just open FD after FD”. This is a common refrain from many employees I have met during my commonsense approach to money management corporate talks.
I notice that many women in double-income households are guilty of letting unutilized salaries pile up in fixed deposits. Talk to your spouse and resolve to work towards your financial goals.
Making firm decisions is at the core of money management. The first decision is often crucial: Should I hire a fee-only financial advisor to manage my money, or should I do it myself? The issue is that 80% of people choose the DIY route without fully understanding it.
They then turn to online forums, post their portfolios, and seek advice. They then shift from inactivity to indecision! If this sounds like someone you know, I strongly suggest hiring a SEBI-registered fee-only advisor from our curated list. More than 1000 of our community members work with them to determine their financial status, set goals, and begin their financial journey step by step. If you switch to DIY later on, that’s fine, but at least you’ve promptly taken care of the most crucial steps.
The DIY solution to money sleeping in FDs
If you do not wish to work with a fee-only financial planner, you can easily DIY this problem.
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- List your goals.
- Jot down clearly the dates when you need money (do not just write the year, time to be specific!)
- For all goals that occur within 15 years, stick to the FDs (too late for equity here)
- You can consider some exposure to equity mutual funds only for goals more than 15 years away.
- Start slowly. Make a small investment in an equity fund. Say 10% of what you park in FD or RD each month. Observe the volatility and then gradually increase the exposure.
- You can also use the freefincal robo advisory tool to create a thorough financial plan.
If you are used to fixed deposits all your life, do not make drastic changes. Start slow change small.
Yes, I have said these things repeatedly over the years because each time I do so, it meets with new eyeballs. Hopefully, this would too.