The end of the financial year is the perfect time to review your financial situation and make strategic moves to optimise your money matters. Here are essential finance moves to consider.
As a young professional in India, managing your personal finances effectively is crucial for securing your financial future. With the end of the financial year fast approaching, now is the perfect time to review your financial situation and make strategic moves to optimise your money matters. Here are some essential personal finance moves you should consider before the close of the financial year:
Take some time to review your short-term and long-term financial goals. Whether it’s buying a house, saving for retirement, or traveling the world, understanding your goals will help you align your financial decisions accordingly.
If you’ve opted for the old tax regime, utilise all available tax-saving avenues to minimise your tax liability. Invest in tax-saving instruments such as Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), National Pension System (NPS), or Tax-Saving Fixed Deposits. Make sure you exhaust the maximum limit under Section 80C of the Income Tax Act.
Review your investment portfolio to ensure it is in line with your risk tolerance and financial goals. Consider rebalancing your portfolio if necessary. Look for opportunities to diversify your investments across different asset classes to mitigate risks.
Additional Reading: Why Is It Crucial To Diversify Your Investment Portfolio?
If you have a health insurance policy, make sure you utilise any available benefits before they expire at the end of the financial year. This includes health check-ups, preventive care, and other wellness benefits offered by your insurer.
Prioritise clearing off any high-interest debt such as Credit Card debt or Personal Loans. High-interest debt can eat into your finances and hinder your financial progress. Consider consolidating your debt or negotiating with creditors for lower interest rates if possible.
Evaluate your insurance coverage to ensure it adequately protects you and your loved ones against unforeseen events. This includes life insurance, health insurance, disability insurance, and any other relevant coverage based on your individual circumstances.
If you have a retirement account such as an Employee Provident Fund (EPF) or a voluntary retirement account like NPS, consider maximising your contributions. Building a robust retirement corpus early in your career can significantly impact your financial security in the long run.
Additional Reading: Why You Should Start Your Retirement Planning When You Are 30
Take stock of your spending habits by tracking your expenses meticulously. Create a budget that aligns with your financial goals and helps you allocate your resources efficiently. Identify areas where you can cut back on expenses and redirect those savings towards achieving your financial objectives.
Invest in financial literacy by educating yourself about personal finance concepts and strategies. Attend workshops, utilise online resources, read books, or seek guidance from financial advisors to enhance your understanding of money management principles.
Lastly, take the time to reflect on your financial journey so far and set realistic goals for the upcoming year. Whether it’s increasing your savings rate, investing in skill development, or exploring new avenues for income generation, proactive planning can pave the way for a brighter financial future.
In conclusion, the end of the financial year presents an excellent opportunity for young professionals to take stock of their financial health and make strategic moves to optimise their money matters. By implementing these essential personal finance moves before the financial year closes, you can set yourself up for long-term financial success and stability.
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Sarita
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