How To Clean Up Your Finances In The New Year

By Adhil Shetty | December 27, 2017

Maintaining a well-planned, organised and stable financial strategy is key to keeping yourself stress-free. Few tips on how to get started.

How To Clean Up Your Finances In The New Year

As the New Year rings in, lots of new hopes and resolutions come along with it. From making lifestyle changes to making professional alterations the list may be endless, but one thing that surely needs attention is cleaning up your finances.

Here are some basic tips that will help you clean up your finances and make better investment decisions in 2018:

Organise Paperwork

We all have too many documents to keep handy and safe – be it academic certificates, financial documents, medical reports or warranty cards. Often we create trouble for ourselves by messing up important papers. Hence, the first thing to do while cleaning up finances is to organise all finance related documents and preserve it somewhere safe. In fact, in this digitisation and paperless era, try and keep a soft copy or scan of all your documents to have it handy when needed. You can try out the government’s new DigiLocker Scheme to help with online documentation.

Additionally, it’s also important to update the finance files whenever required. Maintaining the information in an organised way helps to easily locate relevant documents on time.

Maintain A Contingency Fund

Life is uncertain as we can hardly foresee the future. Situations like an accident, serious illness, losing a job, the death of the earning member of the family are some unexpected situations that may affect the financial status of a family in a negative way. Hence, it is wise to develop a contingency fund to be able to face any situation at any time. Though the amount of the fund may vary based on a person’s spending habits, the standard of life and alike, a contingency fund should at least be worth six months expenses.

Some good options for parking your contingency funds are Fixed Deposits and Liquid Funds both of which are relatively easier to withdraw in times of need when compared to other investments.

Automated Investments To Remain Hassle Free

Finalizing investment options is time-consuming which often results in money lying idle in the savings account for a long time. Automated investments in the form of monthly EMIs help customers invest their money with more ease and comfort. So be it your life insurance policies, SIPs or health policies, link them to your salary or savings account to be tension free from missing due dates.

Manage The Debts

Debt payment history is reflected on a person’s Credit Score which determines the probability of the individual securing a loan in future. Hence, make this a priority and do not hesitate to invest some time in managing these debts. One way to do this is to calculate and prioritise payments based on the rate of interest you are being charged to reap the maximum benefit. For the super organised ones, you can create a monthly calendar for payment of bills as well as automate your payments as mentioned above to avoid missing due dates.

Joint Budgeting

Preparing a realistic budget that you can stick to is vital while doing financial planning. But if you are married and you are preparing your own budget without informing your spouse about it, he/she might not understand or support some of your spending decisions. Hence, it is ideal to opt for joint budgeting and understand each other’s approach and attitude towards money.

Retirement Planning 

Retirement is one such event that affects the financial aspect of our lives drastically. A comfortable retirement needs sensible and well planned financial investments. So don’t just depend on your company PF, and think beyond it. There are some great retirement options in the market, including SIPs and retirement schemes offered by the government like National Pension Scheme.

Explore Re-financing Options

Once a loan gets sanctioned, we utilise the money and start repaying it without exploring re-financing options. Refinancing is an alternative financial planning strategy that helps you replace an existing loan with a new one having better terms. Some internet research and consulting representatives of the lending organisation is enough to find a suitable re-financing option.

Good times will come often and celebrations will continue. But nothing can replace the happiness you will get by maintaining a well-planned, organised and stable financial strategy. So make sure to do financial clean up well this New Year and welcome happiness to your home.

Have a happy and prosperous New Year!

Note: BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for Credit CardPersonal LoanHome Loan, Car Loan, and insurance.

 

 

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Financial Planning Msn Times UCN Yahoo

About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

Leave a Reply

Your email address will not be published. Required fields are marked *