5 Yearend Financial Planning Tips

As we move into the last month of 2017, it’s a good idea for you to re-assess a few of your money habits and enter the new year on a strong footing. Here are five simple Financial Planning tips for the yearend.

Plan your Taxes

December is a great month for you to plan your taxes. Instead of waiting till the last moment to shovel away funds into whichever tax saving investment comes your way first in March 2018 (usually a wasteful Life Insurance plan!), making your tax saving investments three months prior to the deadline gives you time to pause and reflect on your choice of investment. With their short lock in period and potential for wealth creation, ELSS (Equity Linked Savings Scheme) are an excellent option. If you’re self-employed, this is a good time for you to provision for the income tax that you need to pay in the rest of the fiscal, instead of having to scrounge up funds when your CA prepares your annual returns.

Evaluate your Credit Card Spends

Most Credit Card portals nowadays offer you at least a rudimentary online analytics system for bucketing and categorizing spends made in a particular period. This feature can prove extremely useful, should you choose to use it. The yearend is a great time to evaluate your credit card spends for the year, to help you uncover hidden spending patterns that could be holding you back, financially. Perhaps you’ll discover that you tend to overspend at certain times of the month, or on a certain type of product or service. Either way, a deep awareness of your spending patterns will ensure that you keep your credit card usage in check.

Set Budget & Savings Goals

The yearend is a great time to set budgets and savings goals for 2018. Setting up a budget can help you control your spends and leave you more money at the end of each month to save for your important goals. Financial Goals can range from more mundane and frivolous ones such as a vacation or a new car, to critical ones such as your child’s education or retirement. Once your goals are defined, you can proceed to start an online SIP investment to bring you closer to them. Mutual Fund SIP’s can help you harness the power of compounding, saving you a great deal of money eventually.

Cancel or Re-assess Recurring monthlies

Like many people, you may have accumulated a collection of quite a few seemingly small-ticket subscriptions to online services that you no longer need, but are automatically billed to your credit card each month. Examples of these could be online gaming applications or media portals that you once enjoyed using, but now almost never do. You may even have subscribed to services on your mobile network that are no longer needed, but get billed monthly nonetheless. Take time out to draw up a list of these seemingly small money leaks and cancel them all at once. Divert the saved money, however small, into a Mutual Fund SIP.

Nix Those Useless Investments

When was the last time you took a long, hard look at your investments? If you’re like most people in their mid to late thirties, you’ve probably accumulated a portfolio of investments that’s too scattered for comfort by now. Tips from brokers and well-meaning friends, the allurement of New Fund Offers, and the smart sales tactics employed by unscrupulous Life Insurance agents are just a few of the factors that could have resulted in the accumulation of a serious number of ‘lemons’ in your investment portfolio. Before you move into the new year, aim to sit down with a qualified, conflict free Financial Advisor and strike off the investments that are not worth it. This is a cathartic exercise that will ensure that your investments are concentrated in the right places as you move into the new year.