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Financial Moves You Should Make Before the Year-End

IndianMoney.com Research Team | Posted On Wednesday, November 27,2019, 05:51 PM

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Financial Moves You Should Make Before the Year-End

 

 

Since we are approaching the end of the year, it is a good time to re-think about your financial goals. Have you been able to achieve them? How much money have you saved?

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Financial Moves You Should Make Before the Year-End

To secure your financial future and remain sorted here are 5 moves you must make:

What’s the status of your financial goals?

When it comes to financial goals there are several questions you should ask yourself. Have you implemented financial discipline in your life?

If yes, then how far incorporated them in your life? Though we understand the fact that all goals are not for the short term but you must be having some year to year goals too.

To keep a track of your year goals like saving taxes or filling for returns etc. keep a fixed date every month and review the status of your goals. This will allow you to understand how you are following your goals. Additionally, this way you can also understand your priorities and set new goals for the next year.

See Also: What Does A Financial Advisor Do?

Make sure to review your budget:

Normally we plan a budget at the beginning of the year. By mid-year, many of us lose interest in following it.

Therefore, it is important to keep reviewing your budget once a month as it will help you remain focused and dedicated to it. Here are a few questions you should keep in mind while reviewing your yearly plans:

  • Have you stuck to your budget all these months
  • Did you spend money way above your budget
  • How much money you could save? Does it align with your savings goal?
  • Is there any excess expenditure that can be reduced?

Doing this on a regular basis will allow you to understand how well you have been able to manage your finances and will help you prioritize savings over unnecessary expenses. Your observation will help you make necessary changes in your lifestyle so that you can maximize your savings.

Evaluate your debts and pay-off strategy:

Debts have the potential to ruin your financial health and pull you down. Before making further plans, you must evaluate your current debt situation and look at how many loans are pending, are you paying your bills on time or not?

The end of the year is a good time to evaluate your debts and refresh your pay-off strategy. Here’s how you can do it:

  • Stop living paycheck-to-paycheck. Excessive spending is not going to help you is you want to improve your financial health. Save money and spend to satisfy your necessities. Cut down your expenses and dedicate more money to clearing your debts.
  • Aim to clear your debts by paying your credit card bills on time. If you have a loan makes sure to make payments dedicatedly. Also, avoid new debts immediately once you have cleared the existing ones.
  • Review your credit report and credit score to know the status of your finances. It’s time to shift your focus towards rebuilding your credit score and repaying bills can greatly help you repair it. A good repaying history is important for your financial future.

See Also: Basics of Financial Planning

Consider reshuffling your investment portfolio

Investing is the best way to create wealth in the long run. Rebalancing the investment portfolio at the end of the year will you stay on track and make necessary changes according to your circumstances. You can opt for more stock market investments than the previous year, or you may venture into safer investments this year. Shuffling your investment profile will help you ride the market fluctuation and keep you from losses.

For example, let’s assume you have heavily invested in stocks in the current year and over the past few months, you are seeing stocks are not giving you good returns. In that case, you can re-shuffle your asset allocation and reduce equity investments and increase your debt investments. A reshuffle is necessary if your investment portfolio is exposed to equities that are not fetching you good returns. However, you must not consider taking such steps if you are getting good returns on your investments or if your financial objectives are the same.

Review your insurance at least once a year:

Insurance should be an important part of your portfolio as it helps you shield the risks related to your life. Getting adequate coverage in the form of health insurance and life insurance save the day and recover the shocks that life provides you with. It will allow you to safeguard your family’s finances in times of financial emergencies. Therefore it is wise to review your insurance at least once a year to make necessary changes or enhance your insurance cover. 

See Also: Review Your Financial Plans With IndianMoney

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