Financial New Year is the time to start planning your budget for this year.
Ya, that’s true that you can not generally enjoy 1st April like you enjoyed the calendar new year. But, yes, you can plan your finances this time.
What to do in FY 2019-20?
There are many things if planned right now, can avoid your sleeplessness at the ninth hour.
Below is a list of what to plan for this year:
#1. Submit Investment Declaration to Your Company HR
Every year, you invest a lot to save your income tax.
Section 80C and 80D of income tax are the prime ingredients along with Loan repayment, etc. So, check how your investment went in the last financial year and record it.
With a hope that you’ll continue to save similarly this year as well, give a declaration to your company’s Human resource department so that you don’t have pay extra tax in the initial months and your take-home salary gets impacted.
#2. Save for Investments at the Start of Financial New Year
In the first step, you gave a declaration that you will invest some money which will help you save tax. So, to do that you need to plan that in which month you have to invest where?
For example, if your health insurance policy premium is due in January, you have nine months to save for it. If the premium is Rs. 18,000, you can save Rs. 2000 every month and withdraw it in January to pay for the premium.
You can do a systematic investment plan (SIP) in a low-risk debt mutual fund or go for a Recurring Deposit (RD) account in your bank. The burden of a one-time payment in January will be huge as compared to monthly saving for that payment.
Similarly, plan for other investments in this year or the next year. A good financial plan is always necessary to meet all your goals, read here to know more about Personal financial planning and Analysis.
#3. Incentive Allocation
You might have got your incentive or annual performance bonus. Before you go for buying unnecessary things or wasting it anywhere else, use that money to invest for long term goals.
The lumpsum money can be used in many ways –
- You can repay any ongoing loan
- If you have a Public Provident Fund (PPF) account or Sukanya Samriddhi account, investing in that at the start of the financial year is better than depositing in later months. It gives a better return.
Buy a low-risk Debt Mutual fund with the lump sum amount and start a Systematic Transfer Plan (STP) to a balanced or high-risk high growth mutual fund for the long term. (Withdrawing it in the short term may give you negative returns. To get good returns, stay invested for a long time).
#4. Documents Arrange
Arrange all your last year’s records at a place. It may include insurance premium receipts, rent receipts, loan account statements, telephone, and other bills. Before 31st July, you have to submit your income tax returns.
Arranging all the documents right away, when you remember everything you did last year (reviewed in 1st step) will help you later when you submit your income tax returns.
#5. In the Financial New Year, Review Your Finances
It’s the time to review your finances, where you stand and how to proceed, read our article on how properly do the personal financial review.
For those, who invest in the financial market, there is a facility introduced by NSDL to get a monthly Consolidated Account Statement (NSDL-CAS) over e-mail. Once you get your NSDL-CAS up to March, you can use it in the review process. You will be able to see all your market investments done through various channels in a single document. Visit NSDL for details.
What are your plans for this financial year?