This piece can help guide on how organise your personal finance:
Write and review your financial goals
Writing down goals will help bring more clarity to financial priorities. Anup Bansal, chief investment officer, Scripbox, said, “With the financial year appraisal/bonus, your income stream increases which might lead you to plan out for bigger goals. Reviewing your previous goals will set a direction for the new financial year goals. This step is also vital to check if your current investments are optimum in terms of your goals."
Create a balanced financial plan
After reviewing and setting your goals, you can begin putting in place a budget plan for the new financial year, by analysing your requirements, income, expenses, assets and liabilities. The plan should identify required savings for goals and establish the feasibility of the plan.
Review current asset allocation and portfolio
If you have an existing portfolio, then review and rebalance as per your desired asset allocation between different asset classes - equity, debt, liquid, gold, alternate, international and real estate. “The asset allocation is dependent upon your risk appetite and risk capacity. The portfolio should ensure adequate liquidity for emergency purposes and goals required to be fulfilled in the next one year," said Bansal.
Review your life insurance and health insurance coverage
An important element of a financial plan is to determine the required life cover and health cover. The factors that are in consideration are life stage, lifestyle, goals, assets and liabilities. Premiums increase as your age increases so it is good to start at an early stage with life and health insurance. Some other insurances like homeowners or renter’s insurance, travel insurance may be applicable for you in the coming year so you may plan for those as well.
Ensure focus on tax planning in advance
Bansal said that mostly, we don’t bother about taxes till the very end of the year, which can complicate the process for you, leaving more room for mistakes. “So it’s important to look at planning taxes at the beginning of the financial year and take into account eligible tax deductions," said Bansal.
