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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:

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.

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.

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.

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.

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.



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  • Q

    i want to investment in 60 lacs invest in mutual fund and i accept 16 percentage return per year my goal after 10 years 2.80crs what is possible please true guide


    Equities over a long term are expected to give a return of 14-17%. Sensex has given a return of approx. 17% since inception i.e 1979-80 till...

  • Q

    Iwant to invest rs10l free of risk ! Shd i go for bank fd's or as the bank suggest " guaranteed income plan" ? Please guide .


    Yes bank returns are fixed....

  • Q

    My daughter 18 yrs. old is studying at IIT Madras for engineering. She is a tax payer in the 20% slab. I wish to get her a LIC policy at an early age. The agent recomends JEEVAN ANAND from LIC of India. Kindly advise the best options.


    Hello, Jeevan Anand is a with-profit plan by LIC which has an insurance component as well. It is always recommended not to mix insurance and...

  • Q

    I am 40 years old working in private company. Want to invest open ended fund Rs. 2000 per month. Kindly suggest


    The scheme that you should invest into would depend upon your time horizon. If you can stay invested for long term ( 7 yrs + ) then you shou...

  • Q

    I am planning to invest a lumspum of Rs 10000 in Mutual Fund for 2 years horizon. Please suggest me some good funds which will provide me maximum returns. I am ready to bear the risk. Would appreciate your advises. Thanks


    For a period of 2 years, I would suggest that you invest in a dynamic bond fund. However, since you have mentioned that you wish to take ris...

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