Smart Moves: What to Do with Excess Cash | 4 Expert Financial Tips

Welcome to a financial crossroads where the question echoes louder than ever: “What to do with excess cash?” In a world of financial possibilities, managing surplus funds demands strategic wisdom. In this guide, we unravel the smart moves and investment pathways to ensure your excess cash becomes a catalyst for financial growth. Let’s embark on a journey to optimise wealth and make your money work for you.

In India, during festivals, we receive lots of gifts, cash, and bonuses. We, as women and girls, receive lots of cash during Raksha Bandhan and Bhai Dooj from our brothers, and we end up spending that cash on shopping or buying any particular luxury. Don’t we, girls?

So, now, a question might pop up in your mind: what should we do with the excess cash we’ve received?

Here are 4 effective ways to use this excess cash:

1. Fund your emergency reserves

– To manage any sudden or unexpected expenses, one should create an emergency fund, which is equivalent to 6-8 months of monthly expenses so that in the future you don’t have to pressurise your savings.

– Sometimes, saving for 6-8 months of expenses can be overwhelming which might lead us not to create the fund and ignore the same till an emergency arises.

– So, this can be an opportunity for us to invest your excess cash towards building an emergency fund and secure your future against any contingencies.

– Emergency Fund should be created by investing in highly liquid investment instruments such as Ultra Short term funds, FD, RD, etc. You can invest a high proportion in Ultra short-term funds as they offer high returns as compared to FDs and RDs.

– You can check out Lxme’s Ultra Short-Term Plan, which is a highly liquid fund with a targeted rate of return of 6% p.a.* (market-linked returns). This portfolio is diversified, well-researched, and curated by experts.

2. Invest towards your retirement

– Many of us ignore retirement planning by saying that we have a lot of time for retirement; however, it’s critical to start early to avoid any financial stress in the future.

– So, this can be an excellent opportunity for us to start planning and investing for retirement.

– Those who have already planned and started investing towards the same, then Bravo!! You can add this excess cash and achieve your goal early.

– Check out the Lxme’s Retirement Calculator and evaluate the amount you need to invest in order to reach your desired corpus.

– Start investing in Lxme’s Long Term Plan, which is diversified, well-researched, and curated by experts offering a targeted return of 14% p.a.* (market-linked returns). If you have already invested and you wish to add more funds, then you can use the option ‘Invest More’.

3. Pay off your debt partially or fully

– We take up various types of loans in order to fulfil our life dreams and need to pay a major chunk of money towards EMIs
– You can utilize the excess cash you have to repay your loan partially or fully which will help you to reduce your debt and loans.

4. Get Insurance Cover: 

– Insurance is one of the critical financial requirements in order to protect ourselves and our family from uncertain situations.

– One should possess adequate coverage of Term Insurance in order to cover dependents in case of unfortunate demise and Health Insurance in order to cover oneself and family against any medical uncertainty as medical costs are overwhelming.

– So you can utilise this excess cash towards buying insurance or making top-ups in your insurance coverage.

– In case you need assistance in buying Term and Health Insurance, Comment “✋” and Team Lxme will get in touch with you for the same.

This is how you can effectively utilise the excess cash you receive during festivals or birthdays.

Using this cash for your financial goals can aid you in developing your financial capacity. These additional investments are like a cherry on the cake for your goals!

Instead of spending our cash haphazardly, let’s utilise it mindfully!!

If you agree with the above points, Comment “✋” and let us know your thoughts about the topic.

If you found this helpful, share this blog with your friends and family!!

Download the Lxme app now to start investing!

*Mutual Fund investments are subject to market risks; read all scheme-related documents carefully.

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FAQs – Common Questions on What to Do with Excess Cash

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