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Store the sweets, put the crackers in a safe place, fix the chandelier, get the outfits ready – and the orders keep going on. Diwali, the festival of lights is just around the corner, and everyone is busy preparing for the festival of hope, prosperity, and light. Indians tend to spend a fortune on celebrations, whether it is to buy extravagant gifts, gold coins, or jewellery for the loved ones. But when we look from a practical perspective, unplanned expenses may take a toll on one’s financial health. Hence, it is crucial to plan your finances for a joyous and prosperous year ahead. What’s more, Diwali is considered to be an auspicious period to invest. It is believed that the investments made during this period, fetch good returns in the future. Let’s understand how you can brighten your financial future this Diwali.

Put your Diwali bonus to worthy use
A Diwali bonus is quite common in India wherein a lump sum amount is paid to employees before the festive season. If you don’t have an instant requirement, it would be wise to utilise this amount to decrease your debt or even buy insurance, put it in long-term investment options, make smart investment decisions etc.

Go easy on the debt
These days, it’s hard to stay away from debt when you have easy access to credit cards with high limits, and various personal loans. Sometimes, these short-term commitments can quickly become long-term traps if the finances are not properly managed. Ensure that you do not undergo a huge debt this Diwali, especially if you are expected to pay steep rates of interest on these loans. Keep in mind, easy credit does not come easily and often results in a huge cost over a period. Take the pledge this Diwali to try and repay any existing high-cost debt and only borrow if completely required.

Did you start an SIP yet?
If not, this Diwali is a great occasion to invest in SIP, or systematic investment plan. But, what is SIP, exactly? SIP is a mere tool to invest in mutual funds. Even a small investment of Rs 500 each month can grow considerably if you invest in equity SIP. Let us understand this with the help of an example. A monthly SIP investment in an equity fund fetching returns around 14% can easily grow to Rs 66 lakhs in 20 years, which is almost 5.5 times the amount you invest. If you extend the same SIP at the same CAGR to 30 years, you can easily create a wealth of Rs 2.78 cr, which is almost 15 times the amount you invested. That is the power of compounding. You can also calculate this using an SIP return calculator

Diwali calls for fresh beginnings
Start thinking about your long-term goals and then start working backwards. Evaluate the apt asset mix to reach the required investment amount. The earlier you begin with your financial planning, the more time you have to plan your financial goals. You are also blessed with greater opportunities for taking curative action where required.

This Diwali, sit down with a financial advisor or an expert, craft an investment plan, and begin investing. In fact, this could be the best Diwali gift you can give yourself. Have a happy and safe Diwali. Happy investing!