New financial year: Experts tell you ways in which you can manage your finances better

As the new financial year starts today, we spoke with four experts to help you understand few things you should know that will help you manage your finances in a better way. From having an emergency fund to investing in PPF, here are few tips to help you get a headstart in the new financial year.

Hemant Rustagi, CEO, Wiseinvest Advisors

Investing success depends upon how you review your portfolio composition and plan for future investments. The start of a new financial year provides you with an opportunity to do so. That’s because it helps in maintaining the discipline of reviewing the portfolio at fixed intervals. Besides, it’s a good time to start planning your investments to save taxes as well as review your insurance portfolio. Last but not the least, make an attempt to look beyond traditional investment options like small savings schemes, fixed deposits and bonds so as to stay ahead of inflation. Market linked products offered by mutual funds can be a great addition to your portfolio both in terms of expected post-tax returns. However, make sure you choose categories of funds that suit your requirements based on asset allocation and time horizon.

Amit Kumar, Fund manager, PMS, Adroit Financial Services

Usually, investors postpone the tax planning in the last two months of the FY. Instead, investors need to review their financial goals at the start of the year. If some investments have not done as well as estimated in the previous FY, there would be a shortfall in the target amount set for that goal. One may need to make additional investments to cover that gap. In some cases, the target itself may have moved up. For example, the decline in the dollar in the last FY has reduced the cost of your child’s future foreign education, you need to decrease the investment for that goal and allocate accordingly. Another example could be if one wants to invest in ELSS but wary of investing in a lump sum right now due to market conditions, one can diversify by putting the ELSS funds in SIP form to diversify the risk across time.

Mrin Agarwal, Director, Finsafe India

The start of the new year is a good time to do a check on your portfolio to see how much closer you have reached to your financial goals and if any changes need to be made. If you haven’t planned your portfolio as per goals, it is a good time to start. If you are investing in PPF or SSY, do so before 5th April in order to get a compounding benefit for the whole year. Moreover, check if all financial documents are in order and collate data on capital gains, dividend income etc for ITR filing.

Raj Khosla, MD and founder, My Money Mantra

Life is a moving landscape, and priorities and objectives require a hard look, periodically. It is therefore a good time to pause and to re-arrange goals. Immediately re-align the investments portfolio of each asset class in accordance with the new goals. If big-ticket purchases (real estate, expensive car, overseas education expenses) are contemplated in the coming year, you must strategize and plan well in time. Must check the adequacy of insurances – Life, Health, Auto General. Having suffered the Covid shock, do focus on creating a contingency fund, even if one has to do it gradually.