Simply Save podcast | Smart ways to manage your money in 2021

The year of 2020 taught us many money lessons. Ever since Covid-19 pandemic was declared last year, lots of jobs were lost and incomes of many people fell, either because they got salary cuts of their businesses shut down or had to be scaled down. Among many other things, the year of 2020 taught us the importance of having an emergency corpus and health insurance. But our investments too went through its ups and downs. So how should we prepare our money box in 2021? Yes we know that vaccines are on their way, but how long will it take for entire nation to get vaccinated is yet unknown. In the meantime, economy is expected to struggle and markets too are expected to be volatile, especially since they have touched their recent highs.

Also read | Where should you invest in 2021?

In our first Simply Save podcast of the new year, our guest Surya Bhatia, Delhi-based financial planner and managing partner of Asset Managers tells us that with equity markets rising consistently and steadily since March 2020, we have been getting a good opportunity for quite some time now to re-allocate our assets. Don’t just let the absolute SENSEX or Nifty level drive your decision to enter or exit the market, he stresses upon. Surya tells us that we need to see our asset allocation (how much of equity, debt and gold we ought to be holdings onto to, depending on our risk profile) and how much money we might need in the next one year period.

Health insurance is required but the amount of sum assured depends on the size of our families. Presence of senior citizen parents in the health insurance pot means that you might require a bigger sum assured. Lastly, Surya spoke about spending and how much we can borrow. He says that we mustn’t spend more than 30 percent of our take home income. Here again, if we have taken a loan and are paying equated monthly installments, then the current equity market is a good opportunity to take some money off the table and prepay a part of your loan. Lower or no EMIs, he adds, means there is no sword hanging over our heads.

Here’s wishing all our listeners a happy new year and keep listening to Simply Save for more money advice.