Due to COVID 19, many people had to compromise on their savings and investments and also opt for loans. Given the current times' experts suggest, it is better investors took a propper look at their finances.
It is often said that at the start of a New Financial Year, one should reflect on one’s finances, investments and savings to ensure that one is on the right track with one’s financial goals. Experts, however, always suggest periodically checking one’s finances and keeping a track of it throughout the year.
Even though at the start of a new financial year, people generally make important financial decisions, it is vital to keep track of it throughout the year. Financial decisions include anything related to an individual’s finances starting from his savings, insurance protection, investments for better returns, as well as tax saving plans.
Find out if you have made the right money moves, and if your finances are in shape:
- – Firstly, review your financial goals. While doing so make sure your investments and savings are in line with your financial goals, along with your risk profile, and investment time-frame. Hence, it is necessary to review your complete portfolio.
Also, you can take the help of financial advisors and find out how you are doing in terms of your financial goals, if you can not do it by yourself. Even in the middle of the financial year, it is best to revise and modify your investment plans if your existing asset allocations seem not in line with your goals.
- – Make sure you haven’t worsened your debt situation. For instance, take a look at your money outflow towards any new loan you have taken, old loans, including personal loans, home loan EMIs, car loans, etc. along with credit card payments.
Due to COVID 19, many people had to compromise on their savings and investments and also opt for loans. Given the current times’ experts suggest, it is better investors took a propper look at their finances.
Hence, making sure of your money outflow will give you the idea of how much debt you can take on comfortably, without stressing your monthly cashflows. If you have too much debt, it can have financially damaging effects in the long-run.
- – Dust off your insurance policies as they are extremely valuable under this pandemic. Evaluate your Insurance policies and find out if you, along with your family are adequately covered. While making sure of the sum insured, consider your income and dependencies.
Additionally, if you have a family and dependencies, you need to be adequately covered with both life insurance as well as health insurance (including the family). So that, in case of any medical emergencies or an unforeseen event, there is capital to cover the family’s ongoing expenses, taking care of liabilities (if any), and also fund major life goals.
Consequently, keep reviewing your insurance covers, and if you or your family members are not adequately covered with health insurance, you can also opt for a top-up insurance cover.
- – Having as well as maintain an emergency fund is also important, given the time. If you have been investing in an emergency fund, try to keep maintaining it. The emergency fund or contingency fund should include 4 to 6 months of your family’s living expenses, in case of any unexpected circumstances.
Having such a backup will help you not dip into your savings. Therefore, review your emergency fund at regular intervals and top it up in case of any shortfall.
- – Most people wait till the last minute to do their tax planning, but experts say it is better to start your tax-saving early.
Doing this will let investors avoid any last-minute investment decisions in tax-saving products and they will be able to make meaningful investments, to build wealth in the long run.