Spend your wealth in the right direction

There are lot of people who have so much money but they don’t know how to spend it. They are always in the eyes of envious people, but owing so much money and not knowing what to do wit it, is quite an awkward and unenviable situation.

On the other hand, there are small time investors, who don't own a great deal of surplus money, but are in complete control of their finances. These individuals seem to be in the driver's seat where finances are concerned and should in fact be begrudged.

If you look around, you will find so many individuals flashing the latest gizmos and cars, but if you ask him his plans for retirement, or whether he has a financial plan in place to pay for his child's college fees 10 years down the lane, chances are that person will be more keen on discussing 'relevant' points like the features of his latest mobile rather than dwell on the 'irrelevant' issues raised by you.

Money has a significant effect on people. It makes them rush towards the immediate and ignore the future. So you have more mobiles being bought than financial plans being prepared.

Having money is a good thing, but it's equally important to know what to do with it. Below is a list of 5 most critical tasks individuals must accomplish with their money.

1. Plan your taxes

If you are payable to taxes, then strengthen up your tax saving devices. As a law-abiding citizen, paying taxes is most important, so investing on time in the right avenues to save tax is very important.

Some of these avenues are- the traditional Public Provident Fund (PPF), National Saving Certificate (NSC) and Equity Linked Saving Schemes (ELSS). These avenues, if selected correctly, will not only solve the problem of tax saving, but also help to achieve long term goals.

2. Start planning for your retirement

During the twilight years, the most common regret among all is poor savings and investment track record. Planning for one’s own retirement should be the top most priority for all and it should be made a point to start saving early in order to secure the old age.

The goods and services which cost so much today, will cost even more after a few years and insufficient savings will suck you in the hole of misery. This is one of the main reasons why one should start planning and saving for the dusky age.

3. Insurance- a necessity

Life today has become a lot more uncertain than ever before. Therefore, taking life insurance is another objective that should rank high in the priority list of all individuals. In addition to life insurance, an individual must also be equipped with adequate medical insurance.

4. Gear up for eventualities

Emergencies or eventualities never announce their arrival. So one should not shut his eyes to the possibilities of such emergencies. The best way to deal with such a situation is to prepare yourself in advance. Such situations could possibly arise out of an accident or operation that is either not covered by mediclaim or exceeds the mediclaim limit.

At times like these, having a contingency fund can prove to be a boon.

5. Don’t forget charity

If you have surplus money, it is a good practice that you give a small amount of it to the less privileged. There are some charities which qualify for tax benefits, but you ignore them and just focus on giving money away without worrying about how you can benefit from it one way or another.

If you keep these few things in mind, then you will know how to spend the hard earned money in the right direction. You will not only secure your future, but also be prepared for any kind of emergencies.