Its time for mid year financial checkup

With the end of the summers, the vacations too have come to an end and now it’s time to revisit your personal finances and review them. Here are some of the things that you should review and take action as required to get things back on the track.

Assess your budget or prepare one
Cashflows are one of the major things one must always keep track of as these indirectly help you to achieve your financial goals and objectives. By reviewing your cashflows you would have an idea of what is earned and what is spent and now what’s left over. This, in turn, will help you to allocate the investible surplus to your financial goals which would move further in its achievement. If still, you don’t have a budget then you should create one and follow it. This will help you in streamlining your cashflows and eventually your investments.

Automate your savings
When it comes to money, the general approach is to spend what is earned and then if anything is left over is saved. However, you have to do exactly the opposite of it. You first should save around 10 per cent to 20 per cent of your income and then spend the rest of it. This will help you to inculcate the habit of savings. But to further assure that you save as you receive your income, the best thing you can do is to automate your savings. For this, you can start a SIP (Systematic Investment Plan) on a particular date, most probably date post you receive your paycheck every month in liquid funds or ultra-short duration funds which can be further invested via STP or lumpsum switches to other funds based on your risk profile.

Review your investments
When you have a financial plan in place, along with it you also have an action plan. Action plan in nothing but the actions that you need to take to adhere to the advice given in the financial plan. When you have listed certain financial goals, you need to allocate certain assets and investments to those goals to manage investments efficiently. So, reviewing it mid-year would help you to understand the actions that are pending on your or your advisor’s part. This will help you to be on track and be aligned with the investment strategy that suits your risk profile and investment tenure.

Financial goals progress
When you are planning for your financial goals it is really important to review and check their progress. Though the ideal period of reviewing financial plans and financial goals is one year. However, check the progress of the same in mid-year would help you to understand which are the goals that require investment and you can take actions accordingly. It is not advisable to view your financial goals or investments daily as it won’t make any difference. You need to give time to your investments to perform. In a short time frame, you won’t get the complete idea about your investments and in turn your financial goals performance.