If 2017 was a drag on your finances, then 2018 should be the perfect year to buckle up and become financially savvy. Here’s a financial bucket list to help you get started.
In the run-up to the New Year, we tend to make all kinds of New Year resolutions – hiking the Swiss Alps, travelling solo across Europe, free diving with the sharks and so on. However, there’s one crucial thing that’s closely intertwined with all these plans that we often miss out on. That’s right! Our finances.
To help you get off to a flying start, here’s a financial bucket list for 2018! You can thank us later.
This is the first month of the year, so plan your moves well. Generally, January sets the tone for the entire year, and our actions for the remainder of the year mirror our actions in January:
- Begin by drawing up a list of financial goals that you want to meet in the near or long-term future.
- Assess your investment portfolio. If a substantial amount of your salary is going out in income tax, you need to start making some tax-saving investments.
- Mark payment deadlines in your calendar such as insurance premiums, water tax, Credit Card bills, utility bills etc. so that you never miss them.
- Keep your investment proofs ready and submit them to the HR on time to avoid unnecessarily high tax deductions.
Additional reading: The Beginner’s Guide To Creating An Investment Portfolio
This is usually the month the government presents the Union Budget in Parliament.
- Keep an eye out for announcements with regard to your investments and taxation that will impact your household budget.
- If you’re entitled to medical reimbursements and leave travel allowance at your workplace, ensure that all reimbursements have been processed. These benefits give you tax breaks and can increase your tax outgo if you don’t avail them.
A crucial month for completing most of your Aadhaar linking tasks (in case you’ve missed it, we did a blog article on this that you can use as a ready reckoner). The 31st of March marks the final date for the completion of your belated income tax return (ITR) filing.
Additional reading: 4 Aadhaar Linking Deadlines That You Need To Remember
Budget proposals come into effect starting April 1.
- Keep a close tab on how the new budget provisions are affecting your household budget.
- If you invest in Public Provident Fund (PPF), make the payment before April 5 to enjoy a higher interest on your fund.
- April also marks the month of Akshaya Tritiya. So if you’re planning on buying gold on this auspicious occasion, here are some secrets that successful gold investors never reveal.
If you’ve had a good appraisal in April, your increment will start reflecting from May in your salary.
- If you’ve received a substantial amount as a bonus, use it to pay off your debts first. Put the money into your emergency corpus if you don’t have any debt.
- With a pay hike, your tax outgo might also increase. Plan your tax-savings, expenses, and investments accordingly.
Additional reading: 5 Simple Options To Optimise Your Tax Outgo
- To ensure smooth filing of income tax returns (ITR), start getting your Forms 16 and 16A in order.
- Leverage technology to automate savings: Whether it’s setting up auto debits to pay insurance premiums or monthly SIP contributions, using technology to enforce discipline in your spending and budget patterns is a good way to check irresponsible financial behaviour.
- July 31st marks the last date to file ITR for the assessment year 2018-19. You can file it online a couple of weeks earlier so that you don’t miss out on tax benefits. Late filing of ITR will attract a penalty of up to Rs. 10,000 from this assessment year.
- If you’ve listed beneficiaries in your Life Insurance policy, bank account etc. , and if you’ve recently had life events like a marriage, divorce, adoption or birth of a child, now is a good time to review your beneficiaries and make necessary changes.
Build an emergency fund. Life is unpredictable and there’s no way to know when you’ll be hit with another curveball. Ideally, an emergency fund should have 6 months’ worth of living expenses. If you start early, it will be easier for you to hit the desired number.
Additional reading: How To Put Together An Emergency Fund
- If you’ve filed for Income Tax Returns (ITR), you might want to keep an eye on whether the Income Tax Department has processed your tax returns.
- When was the last time you checked your Credit Score? Go ahead and pull up your credit report to check if there are any errors on it. Take a look to see what’s influencing your score. Once you know what needs attention, work on paying those off. This will boost your score greatly.
- The month of back to back festivals. Good to begin the month with a solid budget for expenses. While shopping for friends and family, try to adhere to this budget as much as possible.
- Don’t rack up Credit Card bills because of mindless splurges. This will not only tank your Credit Score but also make you look irresponsible with your finances.
- The Diwali month that can run up your debt to an astounding number if you don’t check your spending on big ticket items.
- Don’t take out a Personal Loan to take care of your Diwali spends without assessing your ability to repay the loan. Diwali should be about burning the effigy of Lord Ravana and not a hole in your pocket.
Additional reading: 8 Surefire Ways To Explode Diwali Debt
- If November’s festival celebrations have left you cash-strapped, now is a good time to chalk out a plan for debt repayments and reviewing your portfolio.
- Review your insurance coverage for your car, home etc. to be sure that you have enough and that you’re not overpaying. Do some research and a comparison to see if you’re getting the best rates or if a switch will make sense.
Now that you’re ready to embrace the new year (and new beginnings, maybe?) with this financial bucket list, give your finances a makeover with investments in Fixed Deposits, Mutual Funds or find out the best Recurring Deposit rates available only on BankBazaar.com.