7 Steps To Refresh Your Finances In The New FY
Setting goals and then making your money work to achieve them can be a gamechanger for your financial life
K S RAO, Executive Vice President & Head – Investor Education & Distribution Development, Aditya Birla Sunlife AMC Ltd
While there is no good time to set money milestones and revisit the investment portfolio, the start of the new financial year provides an opportunity to do so. We give you a list of seven financial to-dos which will ensure your financial journey is smooth and you are able to realise your dreams.
TAKE A FINANCIAL SELFIE
First things first: you need to know where you stand before you can leap. Self-assessment or taking a financial selfie can help you embark on this new journey. Examine your income, debts, savings—everything down to those sneaky subscriptions that nibble at your funds. Knowledge is power, and your current financial portrait is the ultimate tool to help you plan your masterpiece. Please do visit our website to take a smart financial selfie
DEFINE YOUR GOALS
Once you have taken your expenses and investments into account, make a list of your wish list. A tropical getaway, a cosy pad of your own, or maybe a sleek electric bike? Whatever it is, write it down. But don’t let your dreams run wild. Be specific, ensure your goals are measurable and achievable, they are relevant to your and your family’s needs, and time-bound.
MAKE A BUDGET
Budgeting doesn’t have to be a drag— it’s your money’s master plan. Find a budgeting method that is in sync with your style—it could be an envelope system, an app that nags you, or a good old spreadsheet. Ensure you decide how much of your money is going into expenses, and investments and how much is being splurged. It’s time to tell your cash where to go instead of wondering where it went. Give every rupee a job and watch how those jobs turn your dreams into reality.
DEPLOY DEBT DEMOLITION TACTICS
Debt can be a dream-stealer, but you will have the power to conquer it if you are organised. Target your high-interest debts first—a strategy often called the ‘debt avalanche’. As each debt bites the dust, roll that payment into the next one. Another strategy could be the ‘debt snowball’, where you knock off small debts first for quick wins that build momentum.
MAKE YOUR MONEY WORK
Whether it’s ramping up your retirement contributions or diving into some wellresearched mutual funds, investments can help you make your money work in order to achieve a secure future. Mutual funds are like “mutual friends” as in a sense they may help multiple investors collectively accomplish their financial goals. If you’re new to this, consider a chat with a financial advisor. They’re like personal trainers for your wallet and will make your money work efficiently.
GET PROTECTIVE GEAR
Disasters and plot twists can ruin your financial life but taking some steps can ensure they are not able to chip off your corpus. An emergency fund can keep your financial life afloat even in tough times, while taking insurance will insurance will make sure your corpus meant for your dreams and goals is not affected if you were to face any health issues or an unfortunate event. Aim for an emergency fund that can cover at least three to six months of your living expenses, including debt. You must have adequate life insurance to ensure your dependents are protected in case of your demise and a health insurance, which will pay for medical emergencies that need hospitalisation and won’t corrode your corpus.
CULTIVATE A WEALTH MINDSET
Personal finance isn’t just about the numbers; it’s about your mindset, too. Feed your brain with financial literature, podcasts, or join a community of fellow goal-getters. Embrace the process, celebrate the small victories, and always remember that setbacks are just set-ups for comebacks.
Stay informed about financial trends, especially in an election year. Knowledge is power, and understanding how political outcomes can influence economic conditions will help you make better financial decisions. Resolve to learn more about personal finance this year. The more you know, the better decisions you’ll make.
Your financial health is a journey, not a destination. Take the first step towards a prosperous new financial year today and remain committed to your goals. The path to financial empowerment is paved with informed choices and disciplined action. Embrace the challenge, and let this year be your most financially rewarding yet.