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8 Financial Lessons From Diwali 2018 Research Team | Posted On Monday, November 05,2018, 02:35 PM

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8 Financial Lessons From Diwali 2018



Diwali is India’s biggest and most important festival. This festival gets its name from the rows of clay lamps called ‘Deepa’ lit outside people’s homes to symbolize the defeat of spiritual darkness with inner light. This festival is very important for Hindus who celebrate it with fervour and festivity. Diwali is now a National Festival celebrated by Indians regardless of faith. Diwali symbolizes the Victory of light over darkness, Good over Evil and Knowledge over Ignorance. Diwali is the time to enjoy delicious sweets, light bright lamps and have a sparkling celebration with green crackers. The Supreme Court of India has restricted the use of crackers between 8 PM and 10 PM.

Let’s take a look at the history of Diwali. According to the Ramayana, the Great Indian Epic, Lord Rama, the Prince of Ayodhya was ordered by King Dasharatha, to go away from his Kingdom and return only after living in the forest for fourteen years. Rama went into exile with his devoted wife Sita and brother, Lakshmana. When in the forest, the demon king Ravana abducted Sita and took her to his Island Kingdom of Lanka. Rama fought, defeated and killed Ravana.

He rescued Sita, returning to Ayodhya after 14 years. The people of Ayodhya were very happy to hear of their beloved Prince’s return and lit lamps in their houses called diyas, burst crackers and decorated the entire Ayodhya. This is believed to be the start of Diwali which is now celebrated by lighting diyas, bursting crackers, fun and merriment.

Diwali is also celebrated as the marriage of Lakshmi, the Goddess of Wealth, with Lord Vishnu. Naraka Chaturdashi is the second day of the five-day long festival of Diwali. The demon Narakasura was killed by Lord Krishna on this day. It is celebrated by early morning festivities and rituals.

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8 Financial Lessons From Diwali 2018

1. Plan your investments

Do you wait for Diwali Day to plan the festivities? It’s done way in advance. You buy new clothes, gifts for relatives and friends, toys for your children and the latest electronic gadgets for parents.

It’s time to think of your financial investments this Diwali. Do you have a term life insurance plan to protect loved ones and care for their financial well being if something untoward happens to you? What about a family floater health insurance plan to take care of your family’s hospitalization needs this Diwali? A Child Endowment Plan could be a lasting gift for your son. It would take care of higher education and marriage expenses. You could start investing in an SIP of mutual funds this Diwali 2018. You would enjoy returns above inflation and meet financial goals like buying a house or a car.

2. Get a financial advisor this Diwali

You may be good with money, but there’s no harm in getting a financial advisor. A financial advisor guides and helps achieve financial goals.  He is like a Doctor who helps you get well soon.

IndianMoney has wealth doctors who give genuine and unbiased financial advice, to make sure you are not cheated or mis-sold financial products. Our wealth doctors can help achieve financial goals. Insurance agents are known to mis-sell life insurance products like endowment plans to pocket commissions. Wealth Doctors make sure you get the right life insurance products which match your financial goals and needs.

3. Create an emergency fund

When it comes to bursting crackers, its safety first. Follow all the safety tips when it comes to bursting crackers this Diwali. Why not go green this Diwali? Try green crackers which emit less smoke and help save the environment.

Make sure there’s a first aid kit handy for burns and other emergencies. Get your emergency fund ready this Diwali 2018. If you are single the emergency fund must have at least 3 months of living expenses. Make this 6 months if you are married.

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4. Make a well balanced portfolio

Don’t you clean the house and get clothes ironed and shoes polished well before Diwali? Diwali 2018 is the time to get your portfolio rebalanced and ready for anything.

You must be familiar with asset allocation, which is dividing the investment across asset categories. Asset allocation helps balance risk and reward by apportioning portfolio assets to meet financial goals based on your risk toleration and investment horizon.

If your portfolio is light on equity, bring in more funds and maintain a balance between debt and equity. Stock markets have crashed and this is an excellent time to pick good stocks at low prices.

5. Have Gold in your portfolio

Most financial gurus say you must have at least 10% gold in your portfolio. If your portfolio is light on gold, make sure to shore up it up with gold this Diwali 2018.

You don’t need to buy gold coins or gold ornaments. Invest in gold Exchange-Traded Funds popularly called Gold ETFs which represent physical gold in the dematerialized form. Gold ETFs can be traded on the stock exchange just like stocks. You don’t have the hassles of storing gold jewelry and there are no making charges.

6. Have a SIP in equity mutual fund

Diwali 2018 is the time to take a SIP. Systematic Investment Plans called SIPs are a method of investing in equity mutual funds. You invest small amounts regularly say once each day, week, fortnight or year, in an equity mutual fund scheme.

Start a SIP this Diwali 2018. The money invested in the equity mutual fund scheme can meet financial goals like Children’s education, marriage and even retirement.

7. Make a budget

Diwali 2018 is just the right time to start a budget. Making a budget is really simple. A budget must include every rupee earned and spent. A budget doesn’t curb spending and make you miserable.

A budget helps spend better and get more bang for buck. It squeezes value out of every rupee. Make a budget this Diwali 2018 and you will have money to spend on things you really need.

8. Get rid of debt

Get rid of credit card dues and that personal loan before Diwali 2018. Diwali is the time to improve CIBIL score. Getting rid of unsecured loans (Loans with no collateral), improves CIBIL score. These loans have high interest and a delay in repayments messes up credit score. Diwali is the time to wipe out darkness with light. Make sure you wipe out the darkness of debt this Diwali 2018.

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