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Five things to do at the beginning of the year

Five things to do at the beginning of the year

In your endeavor to start the new year on a good note, there are a few things you should never overlook. While you may have your personal goals in place, your financial aims need some honing too. The bigger aspects like a job switch or working towards a much deserved promotion might be some sound objectives to have in the foreground, but it’s often the silent, (yet much needed) backfills that get overlooked. To ensure you great financial health in the year to come, we bring to you a list of five important things you must do in the beginning of the year:

Do your tax planning

Taxes can be a real pain and there’s just so much you can try and do, to reduce the burden off your shoulders. To safeguard yourself from drowning in the pool of taxation, make sure your tax plan is just as good as the new year promises to be. You can start off by visiting a financial planner for some solicited tax saving advice that is aligned to your financial goals. Furthermore, if you are a salaried individual re-check if all the tax saving documents arearranged in order. You will need to submit your investment proofs and other documents like PPF, NSC, Tax saving FDs,ELSS statements, insurance premium certificate and home loan certificates etc. to your employer in order to avoid extra TDS on your salary.

Review your insurance policies

Since your insurance cover is nothing but an instrument that protects you and your family from unforeseen contingencies in life, it should be upgraded as per the ups and down that life entails. While changes are given in every phase, make sure they reflect equally well in your insurance policies. For instance, with added financial liabilities on you, you may need a greater life insurance cover and vice versa. Same stands true for your health cover too. The higher the medical costs you predict, the greater should be the plan coverage you opt for.

Have a strategy in place to improve your credit score

If you plan to take up a home loan or opt for similar credit instruments in the coming year, you must start off by keeping a close tab on your CIBIL score. Since the credit information bureau gets your loan related information from banks and other financial institutions you deal with, any incorrect information shared by your bank can affect your credit score. After all, a healthy credit score is great not only for your financial health, but also for your much sought after psychological peace!

Rebalance your portfolio

As asset allocation is the key to success, it is great to review your investment portfolio at the start of the year, to ensure smooth returns in the months to come. Inappropriate asset allocation in your portfolio can also lead to higher investment risk. Rebalance your portfolio and align your investments with your financial goals.

Asses your loan portfolio

Taking on credit without planning it through maybe be one of the biggest blunders you can commit. To guarantee yourself the best in the credit market, review your loans at hand and throw in a few edits. For instance, you can switch from one bank/NBFC to another to save up on the interest. Similarly, you can convert your home loan from the base rate system to MCLR, whenever feasible.

These few pointers can set you on a fresh path for the year to come, keeping most of your financial hassles at bay. With simple steps like reducing the number of savings accounts, reviewing your financial incomes and outflows and updating your banking records, you can make your monetary journey smooth as honey in the novel year that awaits us all. After all, some well thought analysis and through planning can do no harm, if no good!

About the Author

Pankaj Mathpal

Pankaj Mathpal, Founder and Managing Director, Optima Money Managers Pvt. Ltd. has over 22 years of work experience in Marketing, Financial Planning & Education. Read More…