As the year draws to a close, it is time to review your financial goals and investments. As you tidy up your finances, you can evaluate whether you can continue your chosen plans next year. It allows you to adjust your finances in the remaining three months of the financial year. You could see if you have used the tax-saving avenues to their fullest potential, and if not, you could chalk out a plan to do so by March.
With this timeline in mind, here is a checklist to help ensure your financial goals are on track.
Review Your Cash Flows: Year-end is the perfect time to review your cash flows—earnings, spending, and savings. You can assess if your income growth was as per your expectation. Any change in income or expense would directly impact your financial plan.
“You could look back to check how effectively you could use your performance bonuses. You can study your spending pattern and compare the same with your family budget. You can run through your monthly bills, loan-equated monthly installments (EMIs), insurance premiums, and investments made throughout the year to ensure that you’re maintaining financial discipline,” says Arijit Sen, a Sebi-registered investment advisor and co-founder of Merry Mind, a Kolkata-based financial advisory firm.
Evaluate Your Net Worth: It is an ideal time to evaluate your net worth, one of the most crucial barometers to assess personal financial health. Your last year’s net worth would show where you were, and this year’s net worth would reveal where you stand financially today. “Increase in net-worth year-on-year would mean that your financial position is strengthening gradually over the years. This acts as a motivational factor when it comes to following your financial plan diligently,” says Sen.
Proper Nominees, documentation For Your Insurance and Investment: Ensure you have proper nominees and documentation for your insurance and investment.
“Recently, I came across multiple cases where the head of the family passed away, and the family was clueless about insurance and investments. So here there are two points to take care of. First, ensure that proper nomination is made wherever needed, and second, ensure your family knows where to track all your insurance and investment and knows the key people managing them,” says Anant Ladha, founder, Invest Aaj For Kal, a financial advisory firm.
Review Your Investment Portfolio: Your investment portfolio constitutes investment options such as fixed deposits, mutual funds, national pension schemes, stocks, gold, and real estate. Keeping in mind your savings and investment plan for the year ahead, you must align your portfolio with your desired asset allocation. You must try and assess, if possible, with the help of a financial planner, whether your investments are helping you meet your different goals.
Debt Repayment Goal: You must have a proper plan in place to pay off your debts, especially the costly ones earlier. Home loans are typically low-cost and offer tax deductions. Hence, you must plan to settle home loans later. You could also evaluate your existing loans and get them restructured to readjust EMIs, tax benefits, and affordability. This would certainly lessen your loan burden and increase your peace of mind.
