Pause. Reflect. Action. Are You Taking The Right Financial Steps?

5 Apr 2018by Research and Ranking

Pause. Reflect. Action. Are You Taking The Right Financial Steps?

It’s always worthwhile to take a halt and look in the mirror of your financial life to construe our journey towards financially stress-free life. And, what can be a better field day than the dawn of the new financial year? The beginning of the fresh financial year can prove to be a perfect time to analyse your existing financial plans, write down your financial goals for the year ahead and prepare a plan to achieve those objectives. Here are the 10 financial steps which will help you to kick-start your new year on a secure footing.

1. Assess your insurance requirements

The new financial year may welcome new responsibilities, and you may need to upgrade your insurance plans to align the responsibilities with your financial plans. Don’t procrastinate to opt for the right term plans and health insurance which can protect your family adequately.

2. Start using LTCG Calculator

The Union Budget 2018 startled many investors by introducing taxes on long-term capital gain which is effective from 1st April. Though the grandfathering clause relieved many investors from the pain of LTCG on equities, investors will still have to recollect the stock prices and NAV’s (in case of mutual funds) as on 31st January for LTCG-related calculations. One can start using LTCG calculator available online to simplify and save time while calculating capital gains.

3. Review your investment portfolio and portfolio rebalancing

Reviewing your investment portfolio will definitely help you to put you on the front foot. 2017 was a favourable year for equities, however, 2018 witnessed market corrections on account of a spate of local as well as global challenges. It is quite possible that the ongoing market performance may have distorted your investment mix. Realigning your portfolio allocation to the original composition will help you to stay on track and achieve your financial objectives. However, an investor should only take action in case of major imbalances. On a stock level, review the past performance of a script before hitting the red button on the screen. Exiting from a particular stock due to a drip in their market price levels or the performance in the last few months may not be a good idea. Buying or exiting from a stock should be based on the fundamentals of a company, and if the fundamentals are still strong, an investor is recommended to hold the stock for a long-term to reap the benefits of the power of compounding.

4. Plan tax-saving instruments

It is a good option to consider Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and National Pension Scheme (NPS) to avail the benefits of tax exemptions as per your financial goals.

Tax-saving instruments Tax exemption limit Lock-in period Interest Rates Purpose
PPF INR 1,50,000 under Sec 80C 15 years (partial withdrawal possible)  ~7.9% Risk-free returns
ELSS INR 1,50,000 under Sec 80C  3 years  ~8.7% Medium term goals
NPS INR 1,50,000 under Sec 80C and INR 50,000 under Sec 80CCD You cannot withdraw till the age of 60 12-14% depending on the scheme Retirement planning
Tax-saving bank fixed deposits. INR 1,50,000 under Section 80C  5 years  6-8% Medium term goals


5. Optimize the use of bonus

Rather than squandering it away, it is advisable to pay off your outstanding debts, especially the ones with the high-interest rates. Depending on your financial goals, you can choose to utilise 50% for debt payments and 50% for investment in high performing assets such as equities or towards contingency planning.

6. Submit form 15H or 15G

Form 15H is applicable to senior citizens while form 15G is for people below the age of 60. It can be filed only by people who do not have any taxable income. Make sure you are eligible to submit the forms, as any breach of law will attract stringent action from the tax department.

7. Tax form 26AS

Don’t delay until July to file your tax returns. Ask your employer about the form 16 and in the meantime, you can log in online to check your form 26AS to make sure that all the taxes have been properly aligned with your PAN no. If any variations are found, inform the deductor and get it rectified at the earliest.

8. Review your goals

Few assets may have underperformed, prices may have shot up or a major expense (marriage, education) may be on its way. This warrants a change in your investment patterns to cover the gap. It is advisable to prioritize your goals, prepare a plan to accomplish them and monitor them on a periodic basis. Hiring the credible and experienced financial advisor will definitely help you to untangle your doubts, stay disciplined and accomplish your financial goals.

9. Smart spending and strategy

Smart spending doesn’t mean not spending. It is curtailing unnecessary expenses and distinguishing your needs and wants. Prepare a budget and use apps that help you to track your spending.

10. Start SIP investments

SIPs are effective for rupee-cost averaging as investors can buy more while the prices are down and minimize losses. This aids investors to avoid timing the market and adopt a systematic way of investing. One may start long-term investments in equities, ELSS or ULIPs through a SIP route every month.

Lastly, kill the procrastination to delay financial planning.

Remember the famous adage: "Never put off till tomorrow what may be done day after tomorrow just as well."

This plan help an investor to accomplish his long term investment goals. Long term investment means accepting a amount of risk in the pursuit of rewards.

Wish To Know More?

© Research & Ranking
SEBI Registered Investment Adviser Details:

Registered Name: Equentis Wealth Advisory Services Private Limited
Type of Registration: Non-Individual
Registration No.: INA000003874
Validity: Dec 08, 2015 – Perpetual

Address: Equentis Wealth Advisory Services Private Limited, Marathon Futurex, A-603 6th Floor, Mafatlal Mills Compound, N M Joshi Marg, Lower Parel East, Mumbai 400013
Telephone: +91 22 61013800/18 | Email: | © Copyright 2021 Equentis Wealth Advisory Services Pvt. Ltd. All Rights Reserved. | GSTIN : 27AADCE9006E1ZV
Principal Officer: Manish Goel, Email:, +91 22 61013800

SEBI Office Details: SEBI Bhavan BKC

Address: Plot No.C4-A, 'G' Block Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra | Tel : +91-22-26449000 / 40459000 | Fax : +91-22-26449019-22 / 40459019-22
Email: | Toll Free Investor Helpline: 1800 22 7575