December is the month for retrospection. As the year draws to a close, it’s time to take stock of your finances too. It’s the time to do an in-depth analysis of your income, spending habits, loan EMIs and all things money. Some of you might not want to give the year a backward glance—especially if you have spent most of it tackling debt—but doing so will help you lay down a strong foundation for the future. If you take measures to identify your mistakes, only then can you make amends.
No matter how financially good or bad 2016 was for you, we want you to begin 2017 on a positive and financially secure note. Hence, to make the task of retrospection easier for you, we have identified 12 financial lessons 2016 has taught us all. Check them out!
January – Start Early
January is the perfect month to sit snug under a blanket and sip on hot coffee. While you enjoy all the warmth and comfort, take some time out to set your financial goals for the year. Perhaps, you set these goals really late in 2016 and that’s why 2016 wasn’t a very good year?
From how much money you’d like to make to where you want to funnel your moolah, think about it all. Thinking does not mean daydreaming. You can wish to earn a million dollars and can even earn it provided you have a solid idea in mind and the brains, determination and perseverance to execute it. If you want to give your income a boost, then look beyond your regular job and explore new business opportunities and great investment options.
At the same time, do not forget to give spending a thought. Were you something of a spendthrift in 2016? Well, 2017 is to turn over a new leaf. If you are in the habit of spending beyond your means, then adopt restrictive measures from the very first month of 2017. Nothing can be more auspicious than starting New Year with your finances under control. Allow January to set a healthy spending pace for the rest of the year. Chart out financial resolutions even if you doubt you’ll stick to them.
February – Workplace Benefits
Since financial and calendar years do not run in sync with each other, there are a few things you will carry forward from this year to 2017. We’re talking about investments for tax sops. As a salaried employee, you can make investments that give you some tax relief on your income. Likewise, you can also sign up for offers that your company may have curated for additional tax benefits. These could be food coupons, etc.
The Financial Year runs from April to March. February and March are the months when you submit proofs of your investments. If your proofs do not match up to your declaration, then you will have just a small window within which to bridge the gap. If you are unable to bridge this gap, then money will be deducted from your salary to pay towards tax. Throughout a given financial year, your in-handy salary is calculated based on your investment declarations made to your company at the beginning of a financial year.
March – Continue And Plan Ahead
March is the month to give finishing touches to what you did in February i.e. making last-minute investments and getting all the paperwork done. Now, don’t use up all of March to get your investments and paperwork right. Start thinking about the rest of the year too. April heralds a new financial year. Use March to research what’s hot and trending in the investment world. March is the time to clear old files and clean your desk for new work.
April – Don’t Be A Fool
Don’t let April fool you! It might be spring, but there’s no reason to throw all caution to the wind. It’s time to take action on all your research work. Start making investments and keep a sharp eye on spending.
Most of us wait for the last quarter of the financial year (January-March) to roll by before we remind ourselves to invest. Perhaps you did this in 2016. Investing at the very last minute can derail your budget. So why put yourself through the ordeal? Start investing early. The sooner the better.
May – Read Up
With a lot of paperwork and new investments out of the way, you now have some time at hand. What did you do in May 2016? Went on a holiday? Great. How about finding some time to improve your financial knowledge on your vacation next year? May is the month to explore the world, as we know it, and the financial world too. Keep an eye on the economy and look out for trends and patterns.
Do consider both short and long-terms investments. You cannot park away all your money and hurt your liquidity. A right balance needs to be maintained. So that if you happen to find yourself in need of cash, liquidating some of your investments shouldn’t be a tough nut to crack.
June – Warm Up
Time to shed all those extra kilos and go trim around the waist. But don’t go trimming your investments. June is the time to go digital. Summers are lazy and we understand you don’t want to do much in the sweltering heat. Though, we do know what you did this summer—which precisely is nothing—don’t waste the summer of 2017 drinking coconut water.
As you laze around in a hammock, take your phone out and go digital. The world has gone digital, and with the implementation of demonetisation, we are quickly moving toward a cashless economy. If you have shunned digital so far, then this is the time to get comfortable with using apps and understanding digital wallets. Almost everything from your groceries to making a down payment toward your Home Loan can be done online, via netbanking or other online channels. Get familiar with the tech and learn to manage your earnings, expenses, investments and everything money online. It’s a much safer and faster option.
Check This: Download the BankBazaar Mobile App
July – Think Of Retirement
Did you give your retirement years even a passing thought in 2016? No? We thought so. Time to fix this. Retirement is inevitable and you cannot escape it, especially if you are a salaried person. In fact, the trend is that most people are preparing to retire earlier than usual – some as young as 40! Good thought, but will you be able to manage your expenses post retirement?
Do you have a plan B in mind? If your answer if NO, then now is the time to start thinking about it. Retirement is never too far away. Start building a retirement corpus. If you are nearing retirement sooner than the others, then explore small business options that are easy to execute and will earn you enough money to help you live out your old age in style.
August – Re-evaluate Your Finances
Did you re-evaluate your finances any time this year? Or did you lock away all your money in a Fixed Deposit for 6 months and set it to auto renewal? If it’s the latter, then try not to repeat this mistake in 2017. Come August of 2017, give your finances a thorough look. Perhaps you need to change your investment strategy or cut down on your expenditure. A year is a long time to keep moving at one pace. Even a drive gets boring when you don’t shift gears. Take time out in August to give your finances a jiggle. The realignment just might turn out to be a lot more profitable and productive for your bank account.
September – Show Your Credit Score Some Love
Make sure you check your Credit Score in 2017. If it’s good, well there is nothing to worry about. If it’s bad, urgggg. You need to take steps to fix it. A good Credit Score will win you loans and Credit Cards at attractive rates of interest. How can you say no to that?
Additional Reading: Tips To Improve Your Credit Score
October – Assess Your Insurance Plans
Take time in October to assess the progress of your Insurance Plans. Insurance plans are not a one-time deal. You can change the plan or structure of your Insurance Plans on the go. In a way, it’s recommended that you tweak your Insurance Plans with time.
November – The festive time of the year
Festivities mean big expenses. This is precisely what you did this year. How about changing the pattern in 2017? Since you are starting 2017 on a new note, you are likely to be financially stronger by November. We hope that your savings and investments have grown just like the Movember moustache. So, instead of going all crazy on spending, use this time to repay your debts. We hope you don’t accumulate too much debt. Festivities mean expenses, but those can be controlled.
December – The Closing Act
Phew… the last month of the year. Another year gone and another wrinkle on your face. What needs to be done in December 2017 is what we are asking you to do now. You give the year a backward glance and come up with an even better financial plan for 2018. And of course, we’ll help you there too. What else are friends for?