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  • Writer's pictureKranthi Pachipala, CFP®,CTEP®, CREP®

10 Essential Checklist For A Solid Financial Planning In The New Year

 Essential Checklist For A Solid Financial Planning In The  The New Year

As we enter the new year, As a prudent investor it is important to take a pause and review where we stand today financially. take a step back and review the following these 10 Essential checklist for A solid financial planning In the new year and charge of your financial destiny. Start the year with confidence and foresight #FinancialResilience #GrowthWithStability" #StellarGrowth

1. Review Current Investments

Take a review of your current investments. Make sure, your spouse / family knows about all your investments. all demat accounts / saving accounts / insurance policies / MF folios and informal loans given to friends / relatives. you don't want your hard earned money lost hidden. Better to maintain a physical file with all annual account snapshots.

2. Nomination Review

Assess and update nominations across demat accounts, mutual fund folios, insurance policies, and savings accounts. Verify the correctness of the nominee information, especially if circumstances like marriage have changed since the initiation of certain policies.

3. Review Your Last Will

Preparing and keeping the Will upto date is very essential if you have any assets and you want to distribute them as per your wish instead of court to decide as per the law. You don't want your loved one's fight among themselves or spend money on court battles. If you had any desire to give assets in different ratio to kids/spouse/parents or wish to give to any one who is not your blood relative but he/she sacrificed or helped you, Will is the easiest and most sensible option. 

4. Evaluate Liabilities and Create an Annual Budget 

Take a look at your financial commitments and liabilities. This assessment provides a clear picture of your current financial net worth and helps in planning for the future investments.

Establish a detailed annual budget to understand and streamline your expenses. Identify areas for potential savings without compromising your lifestyle, helping you achieve better financial discipline. 

5. Define SMART Financial Goals

A written financial plan serves as a roadmap, guiding your savings and investment decisions.Investors with a plan generally know what they're saving for, how much they need to put away, and how long it will take them to reach their goals.

6. Build an Emergency Fund

Prioritise the creation of an emergency fund equivalent to 3 to 6 months' worth of expenses. This fund acts as a financial safety net, providing security during unforeseen circumstances.

7. Determine Human Life Value and Ensure Adequate Life Cover

Calculate your Human Life Value (HLV) and safeguard your family's financial future with sufficient term life insurance. Avoid mixing insurance with investments and opt for plans that cater specifically to protection needs.Most people fail to understand this aspect and buy sub optimal insurance plans.

8. Secure Adequate Health Coverage

Even if covered by an employer, invest in personal health insurance. Continuous coverage may be challenging once out of work, and pre-existing health issues could pose difficulties in acquiring fresh policies. Secure coverage proactively.

9. Strategic Tax Planning

Avoid last-minute tax planning by planning ahead of time. This prevents hasty decisions leading to suboptimal investments. Don't buy something just to save tax. for e.g buying unnecessary insurance policies. 

10. Reassess Risk Profile and Asset Allocation

Take a current risk profile test and discuss the results with your financial planner. Adjust your asset allocation based on changes in risk appetite or nearing specific financial goals. For instance, if retirement is imminent, gradually shift from full equity exposure to balanced or debt funds.

 These simple steps help you in a long way in ensuring your successful financial destiny. Start the new year on a prudent note by spending some time and pondering upon these checklist to secure your financial goals and laying a robust foundation.


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