Home » News » Personal Finance»Planning
Apr 09, 2013, 01.11 PM | Source: Moneycontrol.com

5 personal finance pointers for new financial year

This is the time in a year when most people relax after a very hectic financial year. While there would be some who would be finding ways and avenues to invest to save tax, there are many who don’t want to repeat the last minute saving act, which they resorted to last year.

This is the time in a year when most people relax after a very hectic financial year. While there would be some who would be finding ways and avenues to invest to save tax, there are many who don’t want to repeat the last minute saving act, which they resorted to last year. These are the ones who intend to follow a systematic path in investing to save tax and make the most of their monies. For these, here are five things you should bear in mind when it comes to while dealing with your finance efficiently:

Budget:
All companies plan their financial year well in advance. Nowadays many companies ask their employees to contribute to this budgeting exercise by asking the employees in various functions operations, sales, marketing, customer services, administration and also human resources, to come forth with their ‘key result areas’. The very idea behind such budget is to try to increase the probability of success for the company. Something similar you can plan for yourself. The more you know about your spending and your income, the better you can plan your expenditures and increase your savings. Considering this as a new beginning from now you could have a full charge of your expenditure and savings balance sheet.

Taxes:
Tax is an inevitable obligation for most conscientious working people. Most worry about their investments to save tax in the last week of the financial year. This year you can change the situation if you act now. If you are an employee, your employers will ask you to submit your investment declaration by the end of May. Take it as an opportunity and initiate the process of tax planning right now. You may approach a financial planner and get a holistic financial plan for yourself, which also includes your tax planning.

Investments:
Many of us believe in ‘do it yourself’ mantra, but very few act upon it. This financial year, it is the time to embrace -'Think-Act' model. If you buy into an idea, you should subscribe to it. If you know that you have to invest to save taxes, and you believe in India growth story, why not start investing in Indian equities. You can also look at buying into Equity Linked Saving Scheme (ELSS). You can start a systematic investment plan (SIP) in ELSS now, when Indian equities are trading at economical prices in comparison with their performances in the last few years. In the last three years ELSS schemes have given 1.58%. It is probably the best time to invest in stocks, when there are not many keen to buy them. An SIP can help you minimise your timing risk. You can start investing Rs 8500 each month and by the end of the year you will exhaust Rs 1 lakh limit under the section 80 C of the Income Tax Act. You will save taxes and also invest in high growth assets. If you already have an Employee Provident Fund (EPF) or other tax saving investments in place, you may reduce your SIP amount accordingly.

Liabilities: 
It is a good idea to know what you owe. Know the outstanding loans on your name. Check your CIBIL score. Carefully read through your credit report. If there are any discrepancies in your credit report then better take it up with the credit bureau. If you have too many unsecured loans credit cards and personal loans, chalk out a plan to close them at the earliest. If you are in too much debt approach a financial planner to get your debt restructuring done. Most of us get yearly bonus in April. You should use it to bring down your loan liabilities by prepaying your loans. If you pay your loans on time, your credit score improves and you become a more creditworthy person for banks. This year you can achieve this financial goal of becoming a financial sound person if you start working on your liabilities early.

Peace:
Many times we forget the more important thing in life—peace of mind. We try to buy happiness at any cost, and in that process end up losing peace of mind. This financial year you should put your peace of mind as a priority. Spend some time identifying a good term life insurance policy and a health insurance policy. Buy one each with right sum assured. Instead of cursing your bank for not cutting down interest rates on your home loan, try to figure out which other banks are offering competitive interest rates. Identify a good deal and opt for a balance transfer. You can also get in touch with a good financial planner to put in a place all these things for you. Though she may charge you some fees, but it will be less significant in comparison with your peace of mind.

READ MORE ON  CIBIL, SIP, EPF

ADS BY GOOGLE

Ask the Experts

Get your Personal Finance queries answered

  • Q

    Interest rates are going to go down. And all my fixed deposits will be maturing next year. I will have to renew my fixed deposits next year at lower rate of interest. What is the way out?

    A

    Interest rates keep fluctuating due to various micro- and macro- economic factors. There is never an ideal rate of interest. In a high inter...

  • Q

    If I put Rs 2 lakh in PPF, how much tax rebate I will get?

    A

    As per the existing guidelines and rules a person cannot deposit more than 1.5 lacs in one PPF account. However you can deposit money in the...

  • Q

    I want to buy online term life insuance plan. Which is the best one? Should I go for single premium or regular premium policy?

    A

    Single premium term insurance policies don?t make much sense. Why pay such a large amount at one go when you have the option of paying in sm...

  • Q

    I want to invest some money with at least ten years view. I dont want share market risk. Can I invest in NSC? Is there any other investment option?

    A

    NSC or National Savings Certificate is a safe investment scheme offered by the Central Government. It is an ideal option for investors with ...

  • Q

    Is it a good idea to invest in asset allocation funds? if yes, please suggest some good fund to invest money. I am 35 years old and can invest Rs 10000 per month.

    A

    Asset Allocation Funds are for those investors who want to take an exposure into different asset classes but do not wish to create their own...

  • Q

    My CA says that I have to pay tax on interest accrued on my FD of Rs 20 lakh. I have submitted form 15H in all banks. Is it necessary to pay tax in this case?

    A

    In case of interest on fixed deposits which is taxable under the head ?Income from other Sources? a taxpayer has two choices. Either you can...

  • Q

    Please suggest a good investment option of land in South India. I want to buy a land parcel of around 2 acres.

    A

    If you take a look at the South Indian real estate market, Bangalore has emerged as a clear winner. Due to the strong presence of IT/ITeS an...

  • Q

    I want to invest Rs 20000 per month. I have identified Reliance Small Cap Fund and DSPBR Micro cap fund for investment. I can hold to investments for two years. Is it a good idea to invest in these schemes? How much returns I will be getting?

    A

    If you are an aggressive investor, you can consider investing in either of the 2 funds.DSPBR Micro Cap My suggestion is that if you are inve...

  • Q

    I want to save my money for retirment Please suggest a good insurance policy

    A

    For retirement it is advisable to use multiple investment instruments and not just life insurance policies. If you have 15 years or so for r...

  • Q

    IS IT a Good time to invest in GOLD ?

    A

    Currently the outlook for gold is bearish/negative. However if you are planning for a long-term investment in gold it is ideal to invest the...

  • Q

    I have retired from my job in November. I have got Rs 48 lakh from my employers, by way of epf, gratuity and other benefits. Should i invest in senior citizen scheme of LIC? How about pension plans from LIC?

    A

    1. You can invest Post office Senior Citizen Scheme. 2. You also should invest lumpsome in MIP in post office and get monthly interest. 3. K...

  • Q

    I want to save Rs 1 crore for my retirement when i turn 60. Now I am 42 years old and have fixed deposits worth Rs 18 lakh.What should I do to reach Rs 1 cr mark?

    A

    start investing a minimum 5000 per month in mutual fund and increase 10% to 20% every year....

  • Q

    I want to save on my utility bills and fuel expenses.Please suggest a good credit card for me.

    A

    Yes, you will be able to save on Utility bills and fuel expenses through the cash back schemes offered by some of the credit card companies....

  • Q

    I am 36 years old and work in private company. so how can I manage my retirement planning...

    A

    Start with how much you would need monthly today, inflate the numbers and we can work on a corpus and then work on investing monthly towards...

  • Q

    Suggest couple of equity mutual funds for me. I am keen to invest Rs 25000 per month for next couple of years. I can remain invested for at least five years?

    A

    Asset Allocation Funds are for those investors who want to take an exposure into different asset classes but do not wish to create their own...

  • Q

    I am a senior citizen.I received interest of Rs .1,70,000/- on FD.I have duly filled 15G form.I have NO other source of income.Have I to pay Income tax on this interest or can it be excempted?

    A

    Sir, please note if you are less than 80 years but more than 60 years of age, your total income upto Rs 3,00,000 is exempt from tax, you are...

  • Q

    Please suggest a good money back policy for me. I am 27 years old and want to accumulate Rs 10lakh over 10 years.

    A

    If you are a fan of traditional money back policies, go in for the LIC New Money Back Policy of 20 or 25 years. I would suggest you go in fo...

  • Q

    I want to buy a life insurance for my brother Please suggest a good policy. He is 19 years old. he should get Rs 5 lakh when he turns 25 years.

    A

    Best to go in for a ULIP in case he is looking to grow the money also. Go in for a ULIP like HDFC Click 2 Invest which is very low on charge...

  • Q

    In 2013, I bought an Endowment policy from LIC. Premium for that is around 35K per year. Now i understand, this was a big mistake and i want to go for a term insurance policy. I have already paid two premiums in 2013 and 2014 and I want to make this policy paid-up. Can i pay one more premium this year and make that endowment policy paid-up ? Or is there any better alternative ? Please suggest.

    A

    Yes, you can convert to a paid-up policy after 3 years premiums have been paid. I would recommend that you surrender the plan and take back ...

  • Q

    Is zero depreciation cover a good option under auto insurance? I have plans to buy honda city in January

    A

    Zero depreciation is a good option to along with the standard car insurance plan. By paying a slightly increased premium you can ensure that...

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.