The One Financial Myth We Wish Everyone Knew About!

By sanjana | April 12, 2022

Many believe that any investment requires a large amount of money. This Financial Literacy Month, we’re here to quash this common misconception. Read on to find out.

7 Best SIPs Where You Can Invest Small Amounts Of Rs 500

We’ve all said this or thought this at some point in life – “I can only start investing when I have x amount of money.” Procrastination is endless here. Yet, in the end, there is no investment worth any merit. 

Procrastination can be attributed to the fact that investments are not usually an area we are well-versed in. Irrespective of the false assurances we give ourselves towards finally putting some effort into learning and understanding the works of it, the prospect of this actually happening is futile. 

Personal finance management should be an equal part of your long-term plans for the future. Even investing a small part of your income can do wonders! Even if you’re just getting started, it’s not too late!  

Importance of Financial Literacy  

Financial literacy is crucial for all of us as it allows us to understand and maximise what we earn. In short, it equips us with the knowledge and skills needed to manage our finances effectively. Without a solid background on this, our plans for financial freedom are shaky at their foundation. Failing to educate yourself in the basics can leave you with insurmountable debt, erratic spending patterns or, simply put, bankruptcy!  

Becoming financially literate will help you to effectively learn and practise some invaluable skills in money management, debt closure, and utilising credit products in the way that’s most beneficial to you. 

Another area you can benefit from is an investment – often plagued by inaccurate notions and myths surrounding it.  

Additional Reading: Personal Finance 101: Save More Money Without Even Realising It 

Myth: Investment requires a large amount of money 

Fact: You can start with as little as Rs. 100 

Start slow, even if it results in you just getting into the habit of investing regularly- it is still a monumental effort in ensuring your financially secure future. While savings and emergency funds are arguably crucial, investing in the future is just as important. While you may feel dejected or apprehensive about investing with little money, it can still be worth it. Although it seems like a slow, sluggish process, your returns over the years will trump all apprehensions. 

The apprehension when it comes to investments also stems from the natural tendency to fear the unknown or the intimidating. Begin this rewarding journey one step at a time, start with the basics. Although the concept can seem daunting, there are many simple terms, tax implications, planning and investments for you to learn and discover. So, don’t shy away, put your excess funds to work! You can even invest as little as Rs. 100 a month in an SIP. 

For your money to work hard, you need to work hard. If you have earned it, it’s equally important to invest and utilise the same properly. 

Build a budget that works for you 

First, see how much you can afford to invest, and ensure your personal finances don’t take a hit. As long as you aren’t using the money needed to cover your daily expenses, there is no better time to start investing. 

Pro-Tip: Stick to your budget! Irrespective of the budgeting method, always ensure enough money is set aside for your monthly essentials and emergency expenses. 

Additional Reading: 4 Sure Signs Your Budgeting Approach Needs to Change 

What are your investment goals? 

A crucial step in investing is identifying and setting clear goals to begin working on the roadmap for financial freedom. It’s something as simple as how much money to invest or what to invest in. Defining a detailed investment plan ensures the remaining process is hassle-free. 

Additional Reading: A 5-Step Approach To Deciding Your Financial Goals 

Automation is the way to go! 

After ascertaining the amount you want to invest each month, take the legwork out of investing! Just go ahead and opt for auto-investing. Money gets automatically deducted and deposited into your preferred mode of investment. Opting for this will ensure you don’t overspend or spend the money you’ve set aside for investing.  

Additional Reading: What Is An IPO? How Can You Invest In One? 

In conclusion, you may not be a finance Guru, but you can still plan well ahead in advance. Taking the first step is the most nerve-wracking part, but the returns, growth and learning are incomparable. By starting small on your investment journey today, you still have the best of what it has to offer – time. 

While you plan your next steps, begin with checking where you stand in the financial landscape= check your Credit Score for FREE.  

 

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Category: Money Management

About Sanjana M

An avid reader of non-fiction, Sanjana enjoys writing poetry and visiting antique book stores. Apart from being a bibliophile, Sanjana also enjoys thrifting and upcycling vintage furniture.

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