SIP Investment

No Bonus, Increment This Year? Doesn’t Mean No SIP


Surely, this year has been quite challenging for the businesses, economy, and industries. Thanks to the COVID-19 pandemic hovering around our lives, a lot of us haven’t received any bonuses or even increments to match the preceding years. What’s worse, along with lower annual inflow in the bank account, the values of mutual funds are perhaps at a standstill too. So, in such a condition, what should you do about your mutual fund investments? Simple answer would be to invest in SIP to ensure that you regularly contribute towards your financial future in a disciplined manner. Let’s quickly recall what an SIP is.

What is SIP?

Systematic Investment Plan or SIP is a means to invest in mutual funds. Under an SIP investment, a fixed amount is invested at regular intervals for a pre-determined period in specific mutual fund schemes. The investment amount and the periodicity is predetermined by the investor before starting an SIP investment. The periodicity of the SIP investments can be daily, monthly, semi-annually, quarterly, weekly, or annually. SIPs help to instill financial discipline among investors which is essential to attain long-term financial goals. However, how should one go about SIP investments during such times of ambiguity?

Here’s what you can do during such ambiguous and uncertain times.

  1. Don’t stop your monthly investment– While you might have already drawn a detailed growth in your SIP each year, if you haven’t received a significant bonus or an increment this year, it is advised to hold on to your last year’s amount. While doing so, try not to lessen your monthly SIP instalments than previous year as your long-term financial goal(s) is driven by your monthly SIP instalment. If need be, cut down on your expenses but consider SIPs as sacred and do not attempt to break it.
  2. Cut back on several arbitrary expenses– If you have to, you must cut down your discretionary expenses to put up with your SIP instalments. This does not translate that you have to forgo your daily needs and essential expenses such as medicines, rent, food, fees, and so on. Instead, you should reconsider significant spends such as designer apparels, weekend trips, luxurious vacations, etc.
  3. Pay attention on your job – While your mutual fund investments might move up and down in value, your job should be air tight. Only when you give your best in the professional space would be able to enjoy future employability, and a steady increase in your income.

By just slacking on some of these frills, you will realise that you can produce that little bit extra money every month that lets you last your daily lifestyle without dipping into your investment pile or pulling back on your SIPs. You can also use an SIP return calculator, commonly known as SIP calculator to comprehend the returns on your mutual funds on maturity. Happy investing!

Leave a Reply

Your email address will not be published. Required fields are marked *