Get set go: Managing Money in 2016

If you’ve not been able to systematically save and invest for 2015, you could start doing the needful from 2016—sooner the better.

Dec 11, 2015 11:12 IST others Mahalakshmi Hariharan |

With just few more days to go for 2015 to end, now is the time to review your portfolio for the past year, to see how you did, so that you could rectify and take necessary actions, if needed, for the next year. Experts note that by doing so you will understand your saving habits, investments better, and manage your money better.
 
Saving habits/pattern
Now is the time to review your saving habits and see how you’ve done for yourself. Experts note that it doesn’t matter how much money you make, you cannot achieve your financial goal, if you’ve spent all your money. By keeping track of your expenses, spending and saving habits, you will be able to achieve your financial goal with much ease. One of the best ways to do it is to save and invest a portion of your money earned and spend the rest. By following a systematic pattern in saving, you will be able to automatically save for the future, and create a corpus for the long term. With the money saved, you can also set up an emergency fund, if you’ve not done so far. If you’ve not been able to systematically save and invest for 2015, you could start doing the needful from 2016—sooner the better, note experts.
 
Get financially responsible
If you’ve been making late payments on your loans, particularly on your home, auto or personal loan EMIs, it’s time to rectify. Late payments would eventually lead to a poor credit score, which in turn, could disqualify you from loan sanctions in the future. Being responsible, financially, should be one of your goals for 2016, note experts. Just like savings should be done systematically, your bills should also be paid on time, without any delay. That apart, if you are burdened with too many loans, make sure you do away unsecured loans, such as personal loans, as these carry a higher interest rate. At the same time, if you properly plan your home loan prepayments, you will be able to pay off your home loan quickly, say experts.
 
Prepare a budget
To achieve your long term and short term financial goals, it is important to chalk out a budget. Coming up with a financial plan, jointly with family members, will help you organise and monitor your expenses, keep track of your spending habits, note experts. This will help you achieve your goals such as preparing for your retirement, child’s education and so on. You could also take help from a financial planner, who will help you prepare a budget. Some of the personal finance apps will also help you organize your finances, keep track of your financial records and help you stick to your budget.
 
Review your portfolio
By taking a closer look on your investment portfolio, you will get an idea on the returns some of the financial products have offered. For instance, most of us have invested blindly in some of the financial instruments that are not offering decent returns. With inflation only expected to rise in the future, it is important that we review our portfolio, at least at this time of the year, so that we can create a corpus for the long run and save more. Experts say that this process will also help in educating oneself as you will look at different investment products and study them closely, before investing. This, in turn, will also help you improve your financial knowledge and saving pattern. You will also know if you’ve missed out on buying some of the essential products such as life insurance or health insurance.

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