Have you made your financial calendar yet?

IntroductionNew Year is around the corner. While you might be busy changing calendars, have you thought about having a financial calendar? Every year has a calendar which shows the months, days and dates and you plan your affairs around that calendar. What about a financial calendar? Do you plan your finances around one?Many of you might not have heard about a financial calendar. A financial calendar is one which is useful for your financial planning. It guides you on how to save and spend your income in different weeks of the month. If you create your calendar and follow it, you could utilize your income in the best possible way, both in terms of meeting your expenses and creating investments. Do you have any idea on making a financial calendar?Making a financial calendar is simple. You just have to plan your finances around key financial events at the right time. Let’s see how– Month-wise calendarFollowing is a quarter-wise financial calendar for your financial planning - • April to June – In the new financial year, it is time to take stock of your investments and plan for new ones. First, invest in insurance plans. Besides creating an emergency fund you can also save tax on your next tax return. If you have loans continue servicing them. Also, figure your tentative taxable income and plan for tax-saving investments. • July to September – Continue with your investments. If you plan on taking a vacation in the next quarter you should start saving for it. This would ensure that your vacation does not eat into your budget as you would be prepared. • October to December – This is the quarter which is filled with festivities. Festivities entail new purchases and gifts. You should create funds for any big-ticket purchases which you intend to make in Diwali or New Year. Also, a fund is required for New Year celebrations. Towards the end of the year you should start planning for investing in tax-saving instruments. • January to March – This is the first quarter of the New Year and the last quarter of the financial year. Tax planning takes centre-stage in this quarter. Analyse your income earned in the last nine months and also forecast the income for the quarter. Invest in Section 80C instruments to save tax on up to Rs.2 lakh of your income. Buy health insurance plans if you haven’t bought one and save tax under Section 80D. (To know more tax-saving options, click here)Planning for each monthAfter you have planned for the different quarters, you can plan for each week of a month in the following way - • First week of the monthFollow the Warren Buffet principle - Save first, spend later. As soon as you get your income, invest at least 30% of it in different avenues. Of this investment, 10% should be put aside in an emergency fund. After having saved, meet the urgent expenses. Pay off your household expenses and set aside lump sum money for daily lifestyle expenses. • Second week of the monthOnce you have met your household expenses, the next 30% of your income should be used for paying off your debts. Pay the EMIs scheduled and make sure there is no default. Your child’s education fees should also be met in this week.• Third week of the monthPay your bills for credit card, mobile and other utility bills. If you plan on making big-ticket purchases, schedule it for the last week and make provisions for them.• Fourth week of the monthAssess the remaining income in your hand. If all your goals are invested in, try and prepay your loans. If you are thinking of making a big purchase in the coming months, create a fund for the purchase. Points to keep in mind

Big budget purchases should be planned in advance

Tax saving should be done in regular investments throughout the year. Don’t plan your taxes only in March. When investing, choose tax-saving instruments and your tax planning would be taken care of.

• Plan for vacations and unforeseen bigger expenses too (like gifting, buying a luxury, etc.)
• Automate your savings through ECS facility
• Factor in inflation in your budgetary planning

ConclusionCreate a financial calendar and you would know how to utilize your income in the best possible way. Don’t ignore tax planning though. Your investments should be in tax-saving avenues which reduce your taxable income. So, use the above-mentioned knowledge and plan your calendar.

DisclaimerInvestment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.