Financial Guide

How to make your personal finance check list?

Here is a suggested checklist that you can start any year with and as you move forward, customize as per your personal situation.

2020 was an extraordinary year and now it’s ended. We all did so much that we didn’t expect from ourselves and perhaps were not able to do a lot that we wanted to when the year began.

Where investments are concerned too, the year surprised us. Predicting asset returns in January 2020 proved to be a futile effort after all. Yet, all said and done, the principles of investing, personal finance, and financial planning seemed to have been reinforced in this tumultuous year.

That is why it’s important that you have a fundamental financial planning checklist ready to visit at the end of the year, guiding you back on to the path if you strayed or allowing you to cruise ahead if you kept on it steadfastly.

Here is a suggested checklist that you can start any year with and as you move forward, customize as per your personal situation.

Your personal financial checklist

1. Emergency Fund – Keep aside 6-12 months of living expenses in a safe and stable return investment option.

2. Life cover – Have a basic term insurance policy in place to secure your family’s financial future in the event of your untimely death.

3. Medical Insurance – A health cover for yourself and your family that takes care of hospitalization, pre-and post-expenses whenever required.

4. Regular savings – Make sure you save at least 20%-30% of your monthly income.

5. Goal planning – Write down your future financial goals so that you are sure of what you are saving for.

6. Gainful investments – Invest an appropriate portion of your savings in long-term wealth-creating investments so that you have a higher probability of achieving your goals.

7. Reducing debt – Keep your borrowing low and it keeps the mind and money free.

This is the frontline basic financial checklist for every individual. Once this is covered you can customize further depending on your specific money life.

For example, if you carry and use 2-3 credit cards, it’s prudent to bring it down to just one. If you tend to go overboard with travel expenses, maybe adding precise budgeting to your checklist is something useful.

Whatever your checklist looks like, having one can enhance the chances of your achieving a balance in your money life. If you haven’t done this yet, try it out now. Begin each year with the knowledge that your financial balance sheet is in your hands.

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