A new year is upon us, and with all the celebrations and vacationing now coming to a close, it is time for you to keep your finances in place, as we approach the end of the financial year. So, here is a checklist for you to keep in order.

Keep Your Tax Investments in Order

Submit proofs to your employer, if not already done for this year’s tax investments. This could include NPS, and PPF contribution statements, loan interest statements (if you have taken a home loan), Rent receipts (if you are claiming HRA), Insurance premium receipts, or any other supporting documents needed to claim tax benefits.

Ideally, start planning for your next year’s taxes. So that you can reduce your tax liability, and don’t have to wait for your refund amount to plan for your goals. Assess your tax liability under both regimes and choose the one which is more beneficial for you. A salaried person has the option to switch between regimes every year.

Portfolio Review and Net Worth Analysis

It is important to keep track of investments and check if it is still in line with your goals and risk appetite. Analyse the performance of your portfolio and consolidate/diversify the holdings as required. This exercise will help you rebalance your portfolio and prune any unwanted investments.

Though portfolio review is important, avoid frequent churning of your portfolio. This will affect the portfolio performance over long periods as the cost associated with selling/buying new investments keeps adding up.

Review Your Emergency Corpus

If you have withdrawn from your emergency reserve in the past year, make sure you bring it back to prior levels. Ideally, an emergency fund should have at least 6 months of your monthly expenses.


Keep Track of Your Debt and Credit Score

With interest rates on the rise, review your outstanding loans to see which ones charge higher interest rates. Following dynamic debt management, and pre-closing a portion of the principal, if required, will help you come out of debt a lot quicker.

Always close out the debt that charge higher interest rates such as credit card, personal loans, or any unsecured debt should be closed out on priority. Make sure that your credit score is above 750 in any given year. If not, take steps to improve the same. You can check your credit score for free once a year from CIBIL. 


Check the Adequacy of Insurance Policies

A yearly review of insurance will help you avoid lapse of the policy, and make sure that you pay your premiums on time. Ensure that you are adequately covered under both life, and health insurance. 

If you have any insurance policies such as endowment, money back, or ULIPs make sure that you review the performance of these policies, and take action as required. Most of these policies have high premiums but don’t serve the purpose of complete coverage or good returns. Hence, it is advised that you analyse these policies frequently.


Review Your Financial Plan

Do an annual review of your financial plan so that your goals are on track, and you can account for any changes in lifestyle or income in the plan. A financial plan review will act as a one-stop shop for all your other financial to-do discussed above.




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