Most of you must still be reeling from the last-minute financial decisions you took a week back as the financial year came to a close. The new financial year is upon us and while last few days of the last financial year saw a sluggish market (thanks to a list of holidays), the new financial year has brought the focus back on finance and financial planning. So, if you are still procrastinating, it’s time to wake up. You should delve into your financial plan and tune it to adapt it to the new financial year 2018-19. Do you know how to do that?
Here are some tips –
Review your investments
Inflation is nothing new. Over the years, the rate of inflation has been increasing and making things dearer. If past trends are to be believed, experts feel that inflation is posed to increase in the coming years. Here’s what they predict.
Given the predicted (in asterix) increase in inflation, reviewing your investments is a wise choice. You should understand whether the investments you have made would be sufficient for your planned goals or should you boost your investments to achieve the desired funds.
Review your insurance cover
How many times do you compromise on your life and health insurance cover thinking to supplement it later?
According to a survey by BigDecision, here’s how many Indians are underinsured in the context of a health insurance plan –
If you are also a victim of underinsurance, remember that contingency might strike any time. If it does, you should be prepared. So, if you have been procrastinating supplementing your life and health insurance coverage, stop. Review your existing insurance this new financial year, supplement it if required and avail financial security.
Review your goals
While you must have planned and saved for your goals when you started your financial plan, you should review your goals every year. This new financial year is no exception. If you have married and started a family or become proud parents, it is time to review your financial goals. Child planning should, now, feature prominently on your goals which must have been absent earlier. So assess your financial situation and plan for any new goals which have arisen the last year.
Don’t give up on equity
While the new Finance Bill imposed a long term capital gains tax on equity returns, you must not lose hope. Equity still promises good returns. Moreover, the imposed tax rate is only 10% and is applicable only if your gains are more than Rs.1 lakh. So, don’t give up on your equity investments. Continue your SIPs and invest in mutual funds without any fear. They are still a better alternative than other investment avenues. Start investing through Fintoo !
Step up your retirement planning
As you age, you get closer to your requirement. So, essentially, you should boost your retirement planning every financial year. So, this financial year should see a growth in your retirement-oriented savings. Earmark your retirement corpus, if you don’t have any. If, on the other hand, you are already investing towards a retirement corpus, step up your investments. Keep affordability in mind, though. Increase the investments only by that amount which you would be able to sustain throughout this financial year and other years to come.
Don’t ignore taxation
Most of you rush your tax planning in the month of March when the financial year draws to a close. This leads you to make hasty and wrong decisions. Avoid the March rush. Start planning for your taxes from April 2018 itself. Understand the tax implication of each new investment you make and also of your earlier investments. As the tax regulations change every year, your investments strategies also need updation. Just as Mr. Jaitley introduced LTCG on equity returns, you need to understand the tax implications of your earlier investments and also any new ones.
This financial year 2018-19, learn from the mistakes of your earlier financial plans. Financial planning is an ongoing process and requires regular reviews. Review your existing financial plan, make changes if necessary, embrace the new and let go of the old vices. Follow the above-mentioned tips and start your quest to financial independence this new financial year. After all, New Year does bring new hope, doesn’t it?
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