10 Steps To Organize Your Personal Finance In New Financial Year

This article will help you understand ten tips and tricks to best organize your finances in the following year.

1. Start as early as you can

You must already know the famous proverb- "Haste makes waste." Thus, this is your cue to begin planning your finances and investments early, instead of in the last month. 

That is because, during this time, investors like you are also in a rush. Hence, you most likely make a wrong decision during this time. To avoid wrong decisions it is recommended to read a few finance book to enhance your financial game. 

Instead of waiting till March to make financial decisions, planning your finances early would allow you to make informed decisions. It would be best if you start planning them in April itself by opening an account with a Neo bank.

2. Properly plan your budget

It is essential to spend only on what you can afford. Try to plan all your expenditures and savings for the following financial year right at the beginning. 

It would be best if you went through the previous year's income and expenses to make the right decisions. You should set your financial goals and decide your cash flow according to those. For example, if you have received a good bonus, try to repay any loans or debts, even partially.

3. You must always have an emergency fund

You never know what might happen in the future. Thus, it is always good to have an emergency fund to help you in any unforeseen situation. 

Financial experts recommend keeping at least 20% of your salary in your emergency fund. Starting an emergency fund is easy. First, you must set a target date to start your fund and reallocate some amount from the assets you already have. 

You should commit to this fund monthly and channel any extra income to this fund as well.

4. Understand your insurance needs

Insurance can not only help you save on taxes but also helps in serving critical needs. At the beginning of a new financial year, you must determine whether all your insurance needs are covered. 

According to financial experts, your insurance cover must be at least ten times what you earn annually. You should also keep reviewing your insurance needs accordingly with your ever-changing life goals, for example, if you plan to buy a house or get married.

5. Keep your investment portfolio updated

One of the first things to do at the beginning of a new financial year is to review and update your investment portfolio. It would be best to track your existing assets' performance in the market. 

You can then check how that performance has changed since the previous year. You must read your investment strategy if you have experienced significant life changes. You should only invest after a proper evaluation of your needs.

6. Plan on how to spend your annual bonus

If you receive a yearly complement or a bonus, do not spend the money without any plan. It would be best if you spent it well. 

For example- if you have any loans or debts to repay, you should do it when you get your annual bonus. You could also spend the money on a good Children's plan if you have a child. 

If you cannot relate to these situations, you could channel the money towards your savings or emergency fund.

7. Have a good tax plan

One of the best ways to start the new financial year is by planning your taxes. Planning your tax wisely is the way to have a disciplined finance. 

To start planning your taxes, you should first identify your tax slab, as taxes vary according to varying income levels. 

Once you understand your tax slab, you can calculate what you have to pay in taxes and thus can make a tax-saving plan accordingly.

8. Try to reduce your debts

Nobody wants to remain in debt out of their own will. However, limiting or reducing debts is a lot easier said than done. There are certain strategies you can follow to keep your debts in check. 

Firstly, you should try not to buy anything you cannot afford without your credit card. Ensure you always pay off the credit card balance at the end of each month. Try not to own many cards. You should also maintain a proper sheet where you list all your expenses.

9. Keep an eye on your credit score

In this day and age, no one can be without a credit card. However, it would be best if you managed your credits properly. 

If you plan to get a loan or mortgage any property, you would need a solid credit report. So, it would be best for you to pay off your credit card balance at the end of every month and keep track of your credit score.

10. Your financial record must be up to date

A vital part of financial planning is keeping your financial records organized. 

It will then be easier for you to track any future discrepancies. There are several apps that you can use that can help keep track of all your finances. 

Bidding note

Following the tips listed above will help you maintain and keep track of your finances. Besides that, you will be able to plan your finances efficiently at the beginning of every financial year which will then enable you to get the most out of your available assets. It