April might start with a fool’s day but a smart and a wise wo/man will realize the importance of this financial month. Planning your finances for the whole year in April will
- keep you stress-free for the whole year regarding money matters
- prevent you from taking investment decisions just to save tax at the end of the year
- help you review your financial plan and plan timely for any contingency or a setback
Now, that we know why we need to do what we need to do, let’s look at what all we may do to have a profitable financial year.
Investment Goals: When it comes to investments, instead of evaluating our options first, its always best to think of the investment goal. Back planning helps keep focus on the end goal. It also acts as a guide and prevents you from choosing those options that might seem lucrative but may not be beneficial to your particular needs.
Increment Ritual: Every time you climb up the professional ladder and get a raise in your income, reward yourself by increasing your SIP and putting aside some percentage as savings towards your end goal. Making this a ritual will not only help you with future savings but also prevent you from spending all of it in your frivolous shopping jaunts.
Insurance Review: Generally, with our first income, our good old parents give us our first financial lesson in saving. We all, majorly, start small but significantly at that time with a life insurance policy. However, for some reason, we never review it. Interestingly, it is more or less forgotten. Over the years, our incomes change, health factors change, family status changes and even our housing might see a change. Hence, it may be a good idea to re-look at that policy and evaluate whether it’s enough to cover you for the “what if’s” of life or not. Make sure, you are not under-insured.
Long-term goals: You saved and planned for that car and bought it last year. With one of the bonus that you got, you were even able to take that foreign trip! But, are you saving up for an expected expense 10 years down the line. It might be planning for your progenies, your child’s higher education, buying your own house, your retirement. These all would also require money and, I feel, it is wise to start planning for these long-term goals at an early stage for maximum benefits and worry-free life.
Parking emergency funds: Though Savings Account has been a show stopover since ever. However, with changing finance industry, options like liquid funds present a better solution for emergency funds. It has higher interest rate compared to the savings account and offers all benefits that your saving account does. Just like your savings account, you can deposit or withdraw money from it as and when you want.
Old methods might have been beneficial to the needs of our parents, but with the changing individual needs, and availability of newer options, we must plan for our hard earned money wisely. And if you haven’t already a good time would be right now!