How to Plan and Prepare Your

Finances for 2020?

Planning Finances for 2020

Many people make resolutions for the New Year. But making resolutions can never help
you until you are determined and stick to it. Most of the resolutions people make are
related to improving themselves in the coming days. However, resolutions are not
restricted to any specific field and can be related to one’s personal, professional or
financial life. In this article, we will be discussing your financial habits that can help you
to improve your financial health in 2020.
But the fact is any improvement doesn’t happen overnight and it’s important to set
financial goals in terms to achieve them. Financial plan with long term goals helps you
to achieve your long-term goals, but we will suggest you start with short-term goals in
the beginning. Like while planning your finances for 2020, start with a target for
January, try to achieve that, and then move ahead with a plan for Feb and March. Taking
baby steps will always protect you from major failures and on the same hand achieving
the first goal will motivate you for your next target.
Financial planning can vary from individual to individual, and a financial adviser can
help you with it in case of a full-proof plan for your investments and tax savings. Once
you start following your plan strictly, your financial health will be on the right track.
Remember, your financial planning helps you to make the best financial choices and set
a better financial life for you.

Reviewing What You Spent in 2019

 Analyzing how much you spent each month?

 Analyzing your expenditures on necessities, and your wants.

 Which expenditures were unnecessary?

 Where you overspend?

 Where you were supposed to spend but you didn’t?

 Analyzing last year’s investment and approximate return from them.

Set Short Term & Flexible Goals

Short term goals are more likely to get accomplished as compared to that of a long term
goal. You just have to be clear about your goals and should have a proper plan to
accomplish them in a pre-set time frame. But you don’t need to be too hard on yourself
to accomplish them, and that’s the reason we are suggesting you set a flexible goal. One
year is a long time to make progress toward your financial goals. Hence your planning
can be targeted for a month or two, seeing the success of the first plan, onwards plan
can be made.
Spend to Save
Whether you are self-employed or a salaried individual, you should try spending some
to save from your taxable amount.

As per our income tax act, one can save up to ₹1.5 lakh from their taxable income. But to
avail this exemption you need to invest your money under some particular categories
which include FD’s PPF, savings schemes under post office and so on. Doing this not
only saves some from your taxes but also gives you a return in the future. So, make your
strategy clear that you won’t regret it in the future.

Organize Your Debts

This should be on your top priority while planning your finances anytime. We as a
whole realize that we’re in an ideal situation without realizing the seriousness of debt.
Debts are financial obligation which can cause stress and tension when not managed
properly. So, while planning your finances for the coming year you have to be extra
careful. Try to repay your higher interest debt as early as possible as a higher interest
consumes a lot of money. If not this be shorted with your preferences, like which debt is
on priority to be cleared first.

For example- You are planning your finances for 2020, and you have a credit card, a car
loan, a personal loan, and a home loan too. In this case, you need to be clear about your
priorities. In the ideal situation, your preference should be to clear your personal loans
first, as it has a higher interest rate, then comes the car loan and at last home loan. In
case any of you have a credit card debt, then that should be on top of all to be cleared.
This is because credit cards have a very high-interest rate and it can be a never-ending
process when not managed properly.
Save for the Future
After you have done with all the above-mentioned things, you should move in the
direction of building your retirement and contributing investment funds. There are
numerous money related guides available online, try to go through them and
understand the importance of savings. It is always suggested to place 15 percent of your
gross pay into retirement every year. In any case, on the off chance that you have
explicit retirement objectives, you may need to expand this sum.

In case you are not sure about any investment or have any money related issue then
contact experts for the help.

There’s a lot you can do to improve your financial health in one year. Take one step
at a time.
Remember you can’t do everything perfectly at once. Don’t lose hope as there is
always a light at the end of the tunnel, and consistent efforts always are guaranteed
to bring results sooner or later.