Financial Checklist for FY2020-21: 5 money moves to make now to get your finances in shape

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Published: April 1, 2020 1:26:15 PM

This way you can avoid any last-minute investment decisions in tax saving products and make meaningful investments that will also help you build wealth in the long run.

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April marks the start of the Financial Year 2020-21. It is often said, the start of a New Financial Year is the right time for people to reflect on their investments to ensure that they are on the right track with their financial goals.
Experts say at this time of the year people should take their important financial decisions relating to their savings and investments for better returns, insurance protection, and tax-saving.

Here are 5 steps you should take on the first day of the financial year;

1. Look over your debt situation – Take a look at your money outflow towards your credit card payments, personal loans, home loan EMIs, car loans, etc.

You should know how much debt you can take on comfortably, without stressing your monthly cashflows. Know that having too much debt can have financially damaging effects in the long-run.

2. Reviewing your financial goals – In line with your risk profile, financial goals, and investment time-frame, review your complete portfolio. If you can not do it yourself, you can take the help of a financial advisor and find out how you are doing in terms of your financial goals. This is the best time to revise and modify your investment plans if your existing asset allocation is not in line with your goals.

3. Start your Tax Saving early – Most of us wait and do our tax planning at the last minute. The starting of the financial year is the best time to start saving for tax with the help of the right tax-saving products, at regular intervals.

This way you can avoid any last-minute investment decisions in tax saving products and make meaningful investments that will also help you build wealth in the long run.

4. Evaluate your Insurance Policies – If you have insurance policies, are you adequately covered, find that out first. Depending on income and dependencies, make sure you and your family are properly covered.

The insurance policy both health and life cover should cover yourself and your family in case of a medical emergency and provide capital to cover the family’s ongoing expenses, taking care of liabilities (if any) and also fund major life goals, in case of an unforeseen event. Hence, keep reviewing your insurance covers on a yearly basis. If you and your family are not adequately covered with health insurance, you can opt for a top-up insurance cover.

5. Maintain your Emergency Fund – If you have been investing towards creating an emergency fund, keep maintaining it. You have to set aside 4 to 6 months of your family’s living expenses, in case of any unexpected circumstances. With the backup of this fund, you do not have to dip into your savings. Review your emergency fund at regular intervals and top it up in case of any shortfall.

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