Financial checklist for 2020
As we make our way forward in the New Year, it is time to have a checklist in place that would help you to take important and timely financial decisions. Further, it would also help you to effectively take control of your personal finances. Let us look at some of the things that you should consider while making your checklist for the year 2020.
Emergency fund
As the title of the point suggests, having an emergency fund helps you in case of emergencies or contingencies. If you have a temporary income loss, then in such a case, having an emergency fund would help you to cover all your fixed expenses along with your dedicated monthly contributions for financial needs. Generally, it is prudent to have at least 3-6 months of your expenses as your emergency fund. However, you should find the one that suits your needs. There is a possibility that you might need more than 3-6 months of expenses as an emergency fund. So, calculate your unique emergency fund requirement and build it up.
Risk protection
Not just investment but it is important to also protect your life and non-life risks. So, this year make sure that you renew all your life and non-life insurances. Also, consider reviewing and upgrading your insurances and add reviewing and renewing your life and non-life insurances to your checklist. You should also discuss with your financial advisor to understand the insurance requirement.
Tax savings
Everyone must have received an e-mail from their HRs to disclose their investments. It is that time of the year when you need to act smartly to save taxes. Check whether you have utilized the allowable deduction under section 80C and 80CCD of Income Tax Act. If in case you are confused, do consult your financial planner or tax consultant. They would help you with the same.
Financial goals
Investing based on your financial plan is the most appropriate way of investing. Well-articulated financial goals help you to decide, which investment product suits your needs based on your risk profile. Deciding your financial goals should be one of the things that you should consider at the top of your checklist. Do divide your financial goals between needs and wants.