10 money moves to make in 2018 to organise your personal finances

You may have taken some smart money moves in 2017. If you have been an equity investor, chances are you might have made good amount of money if you had picked the right stocks. You might have also bought the right health and life insurance covers and started investing to build a retirement corpus.

However, there would be many who have not paid much attention towards managing their personal finances and investments. So, if you are not so good at managing your finances, what should you do to put your house in order in 2018?

Moneycontrol sought the views of some leading personal finance and investment advisors on what they feel should be the basics steps every individual should take in the New Year to manage their personal finances and built wealth. They advise a number of steps, including buying adequate insurance cover, saving taxes and paying taxes on time, slowly build a retirement corpus and not being reckless on taking loans. This year, one topical advice is to stay away from investing in cryuptocurrency.

Here are 10 money tips for the year from 5 leading money advisors:

Naveen Kukreja, CEO & Co-founder, Paisabazaar.com:

--Focus on goal-based investments: A guiding principle to your investment philosophy should be the financial goals ahead of you. So, whether it’s buying a home, a car or creating a corpus for your retirement or child’s education or marriage, list down your goals and the time frame you have in mind to achieve them. The best investment instrument to achieve these goals is equity funds. Use digital SIP calculators to find out the monthly investments needed for each of your goals and set monthly SIPs of those amounts to ensure regular investments.

--Protect yourself and your family adequately: One of the key components of a strong financial plan is to have adequate protection through insurance policies. In terms of life cover, opt for a pure term policy with a sum assured of at least 15 times your annual income. In addition, get a reliable health policy, which should help you cover all big medical expenses. The rising cost of healthcare and increase in critical illnesses in India have made health insurance extremely important.

Brijesh Parnami, Executive Director & CEO, Essel Wealth Services:

--Be tech-savvy: During demonetisation, mobile wallets and other digital payment options witnessed a huge increase in volume and value of transactions. The note ban was less painful for those who were comfortable using mobile wallets or e-payment options. And for those who had start from the basics of using digital payments, found the going tough. So learning newer ways of managing money will not only make you less dependent on cash but it will also help you manage your money in a more efficient manner

--Be an honest taxpayer:Cash deposits over Rs 2 lakh made during demonetisation were required to be disclosed while filing income tax returns (ITR) for the current assessment year (AY 2017-18). Accounts where cash deposits over the given limit were made came under the I-T lens and some were even served with notices to explain such high value deposits. Therefore, to avoid getting a knock on the door or getting a notice from the tax department, disclose your income honestly and don't attempt to evade taxes. Instead, make tax-efficient investments like ELSS, NPS, tax-saving fixed deposits and PPF

Amar Pandit, Founder & Chief Happiness Officer at HappynessFactory.in:

--Maintain a savings budget instead of an expense budget: This will ensure that you not only save but can also indulge. Set a savings target of 15-25% of your annual income.

--Be smart while taking loans- Learn to make the distinction between good and bad loans. Good loans include home loans (which are long-term in nature) because the investment rate of return will always be higher than the interest you pay. Bad loans include personal and credit card loans because they tend to be very expensive due to higher interest rates.

Rahul Agarwal, Director Wealth Discovery:

--Avoid speculative investment lured by quick gain: In market there are a lot of investment options those are promising a high and quick return, also some of them has a high return track record in the past, like cryptocurrency. BitCoin and Ripple are popular cryptocurrencies that gained multifold in recent years. But it can be a bubble that can be burst any time. Don’t put your hard earned money in such speculative assets that can erase your wealth entirely any time due to its high risk nature.

--Make retirement plan contributions regularly: If you are an employee or businessman having no compulsory deduction towards retirement plan like PF, try to make your own retirement plan as early as possible. You can make some investments in PPF, SIPs, and insurance plans with retirement benefits etc.

 S Sridharan, Business Head, Financial Planning, Wealth Ladder Investment Advisors:

--Read one financial book: In present days, the financial awareness is very less. Due to the ignorance, one may fall in the trap on buying useless financial products. Start this new year with the habit of reading one financial book in a quarter to understand the financial jargons. This helps in taking an informed investment decision.

--Engage with a financial planner: Everyone has a different DNA. Similarly the needs of every individual also varies. Engage with the financial planner. List and prioritise the financial goals and take appropriate action on achieving each individual goals.