Plan for a New Financial Year

We are at the start of a new financial year. This is the best time to plan for the year. Most of the companies give increments from April. So this also helps in planning. So what should we do? As a starter write down what you would to do or achieve during the year. Once you have written down what you want to do, write down when you want to do it, i.e. in which month.

This is important, since if you are not aware of what you want to do or achieve and when you want it, there would be nothing to plan. Now that you have that written what and when, we can start planning how to reach there. So to reach there what we need would be money, right and if the expenditure is going to be big, I am sure you would have been planning for some time now.

To achieve that you would have made some investments. So now have a relook at your investments. If you have some time to reach the goal for which the investment has been made and the investment is not giving the returns you had expected, get out of it. This is a good time, the market has picked up, and so you could minimize the losses.

Now that you have done it, next allocate funds on a monthly basis to each of you needs. This process is called Asset Allocation. I am sure in the list you would have also listed liabilities that you would like to get out of. If you have surplus funds after doing your allocation, utilize the funds to get of high interest rate liabilities.

In fact if your new or fresh investments would yield less than what you would pay to service a liability, it’s better to use the funds to retire the liability then making the investment.  The faster you retire such liabilities, the faster you could build your assets to achieve your goals.

When you planned did you consider Tax? If not, add it to your plan. What I meant is investment to reduce tax liabilities. Don’t wait till March to do your Tax investments, the earlier you do it, the lesser the pressure on you. At the start when I increments, along with that some companies also disburse bonus’s.

Bonus is given for the efforts you had put in during the previous year, and you would definitely want to enjoy. Don’t plan to spend all of it, keep some aside for the future. How much is up to you.