New Financial Year Beginning – Start with a financial plan!!

This topic has been very close to my heart and I have written about it several times earlier as well. Most people embark their financial journey in a fairly unorganized way, spend some and save some; and believe things will somehow fall in place. Yes, things do fall in place but what one does not realize and never get to know that one would have enjoyed a better financial status if followed investments based on some best practices.

So once again, since its start of new financial year, I decided to remind my readers of the important steps that needs to be initiated.

If you do have a plan, its time to review and make corrections, if necessary. And if you do not have one, and believe that your savings will take care of your future, its time to make a structured beginning, sit with your financial advisor and make a plan.

As starter, its just a few simple steps:

Get your risk profiling done:

Your financial advisor will help you take care of this; changes in family, profession etc are some important items that need to be incorporated / updated in the risk profile, these helps identify changes and new areas of investment actions.

Decide on asset allocation based on the risk profile:

Fairly simple, once you know your risk appetite, your asset allocation can be reviewed to match the profile, this ensures that your investment risk management is done in accordance with your needs.

Review your emergency fund status:

I am assuming that you already have allocation in place, just look at its adequacy, any changes can be done.

Review health and life insurances:

If you need to add to your life insurance or enhance your medical insurance, do that first. Insure your critical assets, house etc. If its in place well and good.

List down your financial goals and time lines for each:

Next come to review and update your financial goals and the timelines for each, if you have had a financial plan already and had your goals and requirements, you may also review the progress and identify any corrective action. This ensure that you march towards your financial fulfilment in a structured and organized way and nothing is being left to chance.

Review your current investments and plan new:

Your financial planner will apprise you of the changes in economic situations and the impact, if any, on your existing investment and suggest any changes that may be necessary.

It’s also time plan new investments basis changes in your income and any additional gains.

Don’t leave tax planning to last moment:

And one last one plan your taxes and tax saving actions as well don’t leave it to last min, provision your tax payment as part of your expenses and complete tax saving actions in a timely way.

Document the plan and agree of a periodic review and update:

Having developed the plan and initiated necessary action, its time to agree on a periodic review process with your financial planner, ensure it is done in a disciplined way and any action items identified are completed.

And it’s all set.

Does it not look logical and simple, and ensures full financial security for you and your family?

Happy new financial year.