READY – SET – GO! MAKE THE RIGHT START THIS NEW FINANCIAL YEAR.

Congratulations! You have made it to the new financial year! Amidst covid waves, new variants, wars,?market volatility, last-minute tax planning & ITR filings, the past financial year was surely one bumpy ride. But now that the dust of the previous year is all set on your end, it’s time to start fresh!

It’s time to do what you may have missed doing in the past at this point on the calendar – a thorough assessment, review and planning for your financial well-being. You may well plan and set resolutions to get one step closer this year to being financially free. On the other hand, for some, it may just be the time to get a well-aided handle on their finances. There is simply no better time than now to start the new financial year on the right foot, financially. A work well begun is half done! Here are a few things you should do to secure your financial footing in FY 2022-23:

Plan Your Bonus Allocation

Aren’t we all looking forward to that big number? Incentive/Bonus is something many of us would be getting at this point in time. Most of us have even set our minds on things to buy or places to go. While all that is good, we should not lose sight of our long-term goals in life. We need to be sure of how much to invest out of this bonus! Using the bonus strategically and with good consideration to your financial situation is what is recommended. The bonus can be used in multiple ways like – wiping off your credit card bills, partial or full pre-payment of your high-cost loans, investing for a life goal like retirement, education for children, buying a home, etc. Personal expenses like buying gadgets & consumer goods, new bikes or cars, gifting family, holidays and such things should ideally come after a serious thought is given to the things mentioned above. All in all, you should make the most out of your bonus. After a year of hard work, you deserve to spend on your desires. Just make sure that there is a proper balance in the allocation of the bonus, to not let this opportunity go to waste.

Evaluate Your Current Financial State

With all your affairs wrapped up for the previous year, it’s the best time to look at the bigger picture and find out exactly where you stand. Make a list of all your assets & debts to get a bird’s eye view of your?current financial situation. It can be pretty easy to lose track of accounts, credit cards, and statements of other financial products. With all the details in front of you on paper, you can evaluate and understand your financial situation in a better way. Once you have the picture in front of you, you need to ask certain questions:

• What has changed in the past year?
• How much have you earned, spent and invested in the past year?
• What are pain areas i.e. high-cost debts which you need to wipe off?
• What change do you wish to see at the end of this year?

Review Your Financial Goals

Re-evaluation of goals is yet another necessary thing. Make sure you revise your financial goals and the investments planned for the same. You may ask questions like:

• Are there any new goals you need to add and/or old ones to remove?
• Is there any change in the target amount and maturity date of the existing goals?
• Is there any significant change in your life that needs to be addressed in your financial plan?
• Is proper investment mapping /allocation done for your goals as per priority?

Your financial plan covering important aspects like life goals,?investment/portfolio planning, insurance or protection and taxation, is the core element of your financial well-being. It lays down the path that you need to pursue to live a financially secured life. The start of the new year is just the right time to reassess your financial plan.

Review Your Investment Portfolio

Why leave out your investment portfolio? With high market volatility just behind us, perhaps you should check your existing vs target asset allocation, to see if there is any change required in the same. Ask questions like:-

• What should be your target asset allocation? What is your current asset allocation on the entire investment portfolio? Is it optimum for your profile?
• What post-tax, real returns (net of inflation) can you expect to get on the investments and also the entire portfolio?
• How much are you saving from your earnings? How much more can you save this year?

While considering your investments, please do not forget to consider investments in bank FDs, small savings, PPF, gold and even real estate, to get a fair picture of your entire portfolio made with the objective of investment. If you are expecting increments & promotions, make sure that you also increase your savings and investment amount. The increase ideally should at least match the inflation figures just to make sure that you are saving the same “value” of money as you did last year, not even accounting for the change in your status /ambitions. Sit with your financial products’?distributor /advisor?if needed and update your portfolio to make it in sync with the new realities.

Reassess Your Insurance Needs

Many things may have changed over the years. That is why it is imperative to reassess your insurance needs. See what changes you need in your insurance portfolio. Make sure that you have adequate coverage with term insurance, health insurance, critical illness and personal accident insurance. These are the must-haves in your portfolio in addition to motor insurance which is mandated by law. If your lifestyle, financial status and/or family composition have changed in the past year, you can increase your coverage and/or buy additional policies to stay updated.

Kick-Off Tax Planning

A last-minute tax-saving rush wouldn’t be far from your mind if you did your taxes up-to-the-minute this time and made last-minute financial decisions. Doing your?tax planning?in the months of February and March is now an old fashion and not good also, as it may reflect on the quality of your decisions. The better thing to do is to make sure you have it planned at the start of the year. You may have a fair idea of your spending on things like provident fund, life insurance, etc to know how much balance of 80C you need to save. The simplest and most often recommended thing to do is to start a SIP in Mutual Fund ELSS schemes and Retirement plan towards your 80C deductions. SIPs will make sure that you make the most of the market volatility throughout the year. Do quick planning for other important sections as well to make the most of it.

A work well begun is half done! This new FY is an opportunity to start fresh. Let us commit ourselves to making significant improvements in our financial well-being this year, after the past couple of challenging years. Let us go back to the basics, stick to boring things that actually work over the long term, fortify our finances and implement the learnings of the past in our financial planning. Let us hope and work towards making the most out of FY 2022-23. A financial products distributor or an expert is strongly recommended. And if you want to invest in safe instruments that are most likely to help you with your financial goals, wealth creation and/or if you?want to retire rich, kindly call us at +91 9820926446/7977061717 or mail us at??[email protected]