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Financial planning can seem like a frightening task, because there are so many things to be done to make sure we are moving in the right direction towards our goals. But, if we take one month at a time and spread this important task throughout the year, we will be able to make a financial planning calendar with ease.
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Here we are presenting a simple financial planning calendar, which you can follow to build your framework for a financial plan that suits your needs best.
The beginning of the year is an ideal time to evaluate the monthly income and expenditure of your household. Making your savings plan can assist you with your future needs, as well as both short-term and long-term goals.
Review all your loans – home, car, study, etc. Evaluate the interest payments. Think whether you can make savings by refinancing or transferring your loan balance, or can you afford to make higher monthly payments towards that loan so as to save on interest.
Get an insurance policy for yourself. This will save you tax also, as the financial year ending i.e. 31st March is close.
With your household income and expenditure already evaluated, go over what you are paying towards various utilities. See if you can cut down some unnecessary expenditure. It is always wise to make a budget for easy analysis of how much you are spending and where.
As tax payment is around the corner, you can also make some tax-deductible charitable donations (deduction u/s 80G) which you have been thinking to do so throughout the year but have not done yet. Now is the right time to incur all tax-deductible expenditures.
Pay up your property tax and if you have let out some property on rent, pay the society’s charge if any for rental of premises as this charge is deductible. Your February financial planning calendar should have all these things.
Keep yourself updated about the latest announcements regarding cut-backs or tax-slashes in the budget. Consult a financial planner to see how savings from these can be maximized.
Make sure that you have made all your investments for tax planning u/s 80C. Don’t forget to buy or renew health insurance to get deduction u/s 80D.
April is the month when you need to plan your tax-saving investments for the next financial year. Insurance payments, SIPs, etc. should all be set up so that they run smoothly throughout the year.
If you are salaried, this is the time to repay existing loans or make long term investments as most increments in salaries are announced this time of the year.
Tax returns are supposed to be filed before July. It is wise to compile your returns before June end to avoid last minute hassles.
It is wise to set up an efficient filing system and keep things organized throughout the year. This will avoid any kind of trouble in finding important papers at the right time.
June – September:
With other important things in place, this is a good time to prepare a financial planning calendar keeping future in mind. Explore various options available.
Evaluate the state of your savings and your financial behaviour in this first half of the year. If needed, set stricter limits on your budget, and evaluate if a change in your budgeting rules will help you more.
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Consider the savings made so far to check whether you are moving ahead with what was planned earlier. Make necessary adjustments as necessary. Ensure that your savings amount is suitably invested so as to optimize your earnings.
Every member of your family who receives an income must have a PAN card. This includes children if they have bank accounts or investments in their name. PAN card is essential for opening a demat account to trade shares, purchasing a house or car or getting a telephone connection.
This is the time to check whether you are sticking to all the investment and savings plans made. It is quite likely to get complacent and forget about decisions taken three – four months back. See that your savings are in line with your plans. If not, make necessary adjustments.
Also remember to set up an emergency fund out of your savings, if you haven’t done so. You can set up this fund by parking your savings in short-term liquid mutual funds, so that your emergency fund can grow as well. But before parking your funds, you should learn about mutual fund investments with online resources.
Remember that September 15 is the date for payment of advance tax. Keep your paperwork ready.
With the festive season and holidays around the corner, make sure you make necessary arrangements. It is a good idea to set aside an amount for some festive shopping or a family holiday. Some sort of indulgence is a must for that ‘I am feeling good’ factor.
Take out some time for asset reallocation or portfolio re-balancing. If a particular area seems good, transfer some of your funds there.
Explore and learn about the different types of asset classes available in the stock market, to shuffle your portfolio. You can also choose to set up new SIPs, or an STP if you want to shift your investment from one category of mutual funds to another.
Most salaried people receive their bonuses around this time. Make sure that this money goes into some kind of investment or in getting something for which you have longed for an entire year or more.
You can deposit such bonuses, if received, in a lump-sum investment in index funds or ETFs, which are a great way to carry out passive investing in the stock market.
Think about your retirement plans. Decide at what age you want to retire and make a plan towards saving enough to make that happen.
Evaluate the various types of retirement planning instruments that the government offers, and compare them to private bank offerings, to make the best decision that suits your needs.
The end of the financial planning calendar can be a reminder to consider making your will. Make a list of all your assets and your dependents. Meet your lawyer and get some reliable witnesses.
As this is the end of the year, evaluate the current state of your investments yet again, and how close you have reached to your financial goals.
During the year, we might have come to find more financial goals for ourselves that we hadn’t planned for before. Now, as a new year is beginning, set a combined list for your old and new financial goals, and restart your planning again.
The above calendar is a simple framework of what one’s financial planning calendar should seem like, if they want to fulfill their goals and achieve financial security timely.
With a calendar, we can ensure that all our financial goals, old or new, are accounted for in our actions as informed tax-payers and financially literate people.