Firstly, wishing all our readers and friends out there a glorious and peaceful 2022 from Team Defynance!

2020 began with COVID-19, the traces of which were quite evident in 2021. Since 2020, we have learned our ways with covid and are determined to not just survive but also thrive as humans. The world continues to conduct business and research, provide education and medicare facilities, travel and celebrations as we gradually conduct our lives meanwhile accepting the existence of this virus.

As we usher in 2022 with great hopes, most of us have enlisted a bunch of financial goals we aim to achieve. Let's draw a simple yet effective path towards conquering your goals.

Setting Reasonable Goals

While it might be good to have a high-spirited head start, you might also want to reconsider any of your overambitious goals. The aim here is to set reasonable benchmarks which will enhance your overall financial strength. Having a rational goal could prove to be a good point to start with. Another important facet to remember would be to keep your goals dynamic. They should be flexible enough to adapt and modify to accommodate external environmental changes.

Categories

Long-term financial goals and short-term financial goals are the two main categories to consider, depending upon the target date set to achieve these goals. Six months to one year for a short-term goal and anything beyond one year would fall under the long-term goal category. This segregation would help you in prioritizing and channelizing your funds. A key to determining the category could be the additional costs that will be incurred due to the time factor. For example, paying off a debt with a cumulative interest rate would be a priority over buying multiple properties from an investment perspective.

Budgeting

Draw up a budget considering your income and expenses. A budget enables you to view and understand your expenses with specifications that otherwise might go unnoticed. It is an effective tool to track your spending and make necessary modifications as necessary. Consider raising your saving percentage which might help you contribute more towards your financial goal. Most importantly, try to stick to your budget.

Resource Allocation

To maximize the benefits from your resources, you need to allocate them in the most efficient manner. You might have agile funds which remain uncalled for in your saving account. These are required to maintain liquidity in case of an emergency. However, some portion can be invested in funds that provide liquidity as and when required. In a way, try to put your idle funds to work and grow your earnings. Also, evaluate if your existing investments can be utilized to get rid of any debt.

Prepare for Failure

Let's not forget there are fair chances of falling short in achieving your goals. Although, this possibility of failure should not refrain you from giving yourself a chance or a second chance if need be. You can always re-evaluate your steps, find out the errors and fix them to reach your goals. Even if the goals remain unachieved, you can take lessons for your future plans.

Things to Avoid

Being ambitious with your efforts to achieve financial endeavors can be challenging at times, however, a strong will can get you through tough times. Meanwhile, it is important to remember to cherish other aspects of your life like your family and health. Chasing your goals should only be a part of your life and not the whole purpose of it. Avoid making comparisons with others as everyone has their unique set of abilities and setbacks. Lastly, avoid replicating anyone's goals and their journey to achieve them.

Have any questions or need help to achieve your financial goals? Reach out to us with your questions and help us help you achieve your goals.

Shopping as an activity is relaxing for some while stressing for some others. The deciding factor for this difference in experience? A shopping budget!

On a serious note, buying capacity of an individual has a strong and direct influence on the lifestyle adopted by that person. That being said, there are several big-ticket items necessary to maintain a basic but decent lifestyle. For example, kitchen appliances like refrigerator, cooking range, blender, etc. household items like furniture, vacuum cleaner, or even a personal laptop or phone can take a huge cut from your paycheck (at times 2 paychecks!).

On a larger scale, it could be wedding expenses, buying a house, or sending your kid to college and the possibility of medical expenses cannot be ignored. So let's take one step at a time. There isn't any formula that will keep a step forward when hit by these expenses. But planning your finances in the right manner can help you survive the blow.

Analyzing Your Needs

"Do I really need to buy it?"

Your purchase journey should begin only if the answer to this question is positive. Often the urge to buy something is stronger than the actual need for it. We can convince ourselves that we deserve the expense, or that we can immensely afford it, and learn not to be guilty about it. Hence, we need to stop ourselves and ask if the said purchase is utterly essential. This simple question might save you from committing an unnecessary expense. Analyze cost against a benefit or are you already in possession of something that can be used as a substitute? It would not be wise to overburden your wallet just for a shopping experience.

Expense Fund

In case you are aware of an upcoming expense that is going to take on your savings, you can start by keeping aside some extra savings from your paycheck dedicated wholly to this expense. An expense fund could protect your savings account to be used for some better purpose in the future and your investments too can remain untouched.

Time your Expenses

Black Friday Sale just walked past us with great deals all around. Big-ticket household items or kitchen appliances can get tagged with huge discounts which can save you a lot. You can stall buying these items till the sale season arrives depending upon the urgency. A $50-$100 discount behind every product can certainly have an evident impact on your wallet.

Emergency Fund

Medical expenses, car repairs, and home repairs can burn a hole through your savings unless you have a sturdy insurance plan to back you. Even so, out-of-pocket expenses could raise concerns for many individuals. For times like such, a percentage of your paycheck could go to emergency funds. Keeping in mind the medical and ancillary expenses, these funds could prove to be a savior from filing for bankruptcy.

Home & Education

These are the most critical and hence can be categorized as life-turning events. Buying a home can be your dream expense and requires a whole lot of planning as you invest your funds and borrow a loan to finance the gap. This could be extremely tricky as a home loan costs you interest and generally is long-term debt. If you are thinking about buying a house, you will want to take a careful look at your finances to make sure you are ready for this new commitment.

Similarly, education comes at a huge cost, and hence student debt is an entangled issue country-wide. It is recommended to seek financial advice from an expert who understands the industry norms and conjugates them according to your requirements and ability. To view some effective tips for financing your education, please click here.

Expenses cannot always be avoided and hence planning your finances in the right manner can let you cherish your money's worth instead of stressing over the bill amount. The primary motivation for earning money is ultimately linked to the need for a comfortable and joyous lifestyle. Let us know your views on managing expenses efficiently in the comments section below. Also, if you're looking for help on how to manage your finances, be sure to check out our resources page for more information.

Quick side incomes, ways to boost your net income, how to manage finances efficiently...

These are some of the most common searches done by someone who wants to earn some extra money to meet expenses, or for some even serious reasons. But the most important question among these could be how to manage finances efficiently? It wouldn’t be a tort to say that a person can only have limited control over their earnings, as it depends on numerous external factors. However, if the income earned is managed in the best possible manner, it can have multiple benefits.

A closer look at your expenses

The first step which comes to mind is getting rid of unnecessary expenses. Which could range from unutilized monthly subscriptions to loan interests. When it comes to education loan interest, it’s the most common among fresh graduates and a prime factor to reduce your net monthly income to a large extent. Additionally, it holds you back from making savings, investing in your future, eventually refraining you from accumulating sufficient funds to repay the loan debt wholly. Unless you bag a high-paying job, which ensures a booming salary to take care of your expenses and repay your education loan, escaping this turmoil seems highly unlikely.  

Refinancing could be a boon

On several occasions, the thought of refinancing crosses your mind but the fear of harming your credit score can keep you from evaluating this option in depth. Contrary to common belief, refinancing can do minimal harm to your credit score if you manage to avoid multiple hard inquiries. According to Equifax, “Multiple inquiries from an auto loan, mortgage or student loan lender typically don’t affect most credit scores”. In the long run, with timely payments, any negative impact on your credit score can be reversed.

Plan of action

A small step forward in this direction would be to book a consultation call with a refinancing company and understand the whole process in depth. Ask your consultant about the best fit for you. Let them know about your future financial needs for them to be able to draw a customized plan of action for you. In hindsight, you would realize the importance of this consultation as evaluating every possible option out there can be overwhelming and time-consuming.

To sum it up

A well-designed refinancing plan can free you from shelling out those unwanted interest payments. It’s implied that this freedom is accompanied by the liberty to take the career path you desire, invest for a better future, take a much-deserved vacation, and most importantly lead a stress-free life.  So go ahead, book your consultation and let your money be put to better use.

When you get into investing, you hear the same thing all the time; "You need to diversify your portfolio", "Don't put all your eggs in one basket", etc. While it's good advice, it doesn't really tell you what you need to do. Sure, you can invest in the S&P 500 and that will spread your investment across 500 different companies, which is great. However, more than a quarter of the S&P 500 is in technology. That doesn't exactly seem diverse. So, let's look at some alternative investments that can help you improve that diversity. 

Buying Real Estate to Diversify for Portfolio

One way you can expand your portfolio is by investing in Real Estate. And it can be as easy as buying a stock on the stock exchange. A REIT is a type of stock for a company that manages real estate, so by owning part of the company you're investing in real estate. However, one problem with REITs is that you have no say over what real estate is built or managed.

Another option is companies like Fund That Flip or Fundrise. Companies like these can give people access to projects that were previously only available to multi-millionaires. Through Fund That Flip, you can invest in real estate projects and earn up to 9% return on your investment. And you're even protected on the downside in case the project fails, because each project is backed by a mortgage. The only downside is that you must invest at least $5,000.

Exchange Traded Funds (ETFs)

Another popular commodity that anyone can purchase these days are ETFs. And many can be purchased on major stock exchanges. An ETF is a collection of securities, like stocks, that are tracked by an index. For example, a major ETF, SPY, tracks the S&P 500, so if companies in the S&P 500 do well, so will SPY. You can even see a list of their stock holdings. 

A major benefit of ETFs is that there are ETFs for everything, like the S&P 500, foreign markets, or even the entire market. There's even ETFs that focus on socially responsible investments, so that you can feel better about where your money is going. Owning a share of an ETF is like owning a slice of many different securities. Just make sure you look into the fund to see what it is tracking and do research before making a decision. 

Invest in Defynance

There's actually two ways to invest. For accredited investors, you can invest in our ISA Credit Fund, which will allow you to invest directly in income share agreements. With this being a new and exciting asset class, you'll be sure to diversify your portfolio and lower your risk. With our product, you can earn high returns with low volatility due to unlocking income as an asset. Investing in the ISA Credit Fund also comes with tax deferral benefits, since any gains are not realized until after you recoup your initial investment. 

But wait, isn't Defynance a technology company too? Well you got me there. However, investing in a growing company, and in our case, a startup, can add diversity to a portfolio of mature companies too. On Defynance, you can find more about our company offering and make an informed decision. Or you can also invest in us because you believe in us and what we do! 

*Our content is intended to be used and must be used for informational purposes only. It is important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.