One of the most celebrated festivals in India, Diwali is just around the corner. The festival of lights signifies the triumph of good over evil and new beginnings in everyone’s lives. But, did you know Diwali also teaches us important financial planning lessons?

Here are the top takeaways you can learn and benefit from this Diwali.

1. Plan in advance

We gear up to celebrate Diwali months in advance. Right from shopping for clothes and sweets to planning for gifts or house renovations, we chalk out a detailed plan. Similarly, we can be just as enthusiastic about planning an investment strategy. A well-thought-out plan can give you a head-start and save you from making hurried decisions towards the end of the financial year.

2. Prioritise safety

Parents take the required measures to ensure their children are safe while bursting firecrackers on Diwali. The same caution and planning can go a long way in improving your financial health. Health and life insurance are critical investments to provide for a safe future. Look at offerings from leading health insurance providers and understand their plans to ascertain where to invest money in order to secure your family with the right coverage.

3. Goal-based investing

Celebrating Diwali means gifting our loved ones with thoughtful presents according to their age and personal preferences. Likewise, while considering various investment options, you could settle for the ones that commensurate with your risk appetite and financial objectives. For example, you can invest in mutual funds for a long term goal such as buying a home or creating a marriage fund for your child’s future. Mutual funds help you save on tax and grow your money in the long run.

4. Diversify

We all have distinct tastes or choices when it comes to firecrackers, sweets, clothes and more. Similarly, investing in different company stocks across multiple sectors can be rewarding. By diversifying your portfolio, you can lower your overall risk and avail the benefits of each scheme for maximised returns. You can invest via regular SIPs in a mutual fund for a disciplined approach to investing. SIP investments offer ease of investment. With a SIP, you can start investing for as low as Rs.500.

5. Review your portfolio

As Diwali approaches, you ensure our home is well-scrubbed and sparkling clean. You give away things you no longer need to make space for newer items. Likewise, smart investors too rebalance their portfolios to ensure their equity-debt allocation matches with their long-term investment goals.

Conclusion

Make this Diwali more fruitful by keeping these financial lessons in mind. Start by learning how to invest in SIP to get in the habit of regular investing. Remember to start planning for your investment goals well in advance, diversify to create a balanced portfolio and keep monitoring its performance for the best returns.