10 Steps to Personal Finance Organization

The 31st of March has gone. Was the final month of the previous fiscal year stressful for you? Do your last-minute tax-saving efforts typically lead to the incorrect investments? If you answered yes, you’ve come to the correct spot. This blog has provided you with advice on how to manage your personal finances in the new fiscal year.

E. Thomas Garman and Raymond Forgue’s book “Personal Finance” describes Personal Finance as “the study of resources, both personal and familial, that might be deemed vital from a financial standpoint.” It entails spending, saving, safeguarding, and investing these financial resources.

Personal Finance Essentials

Most individuals fail to create a good financial plan due to a lack of knowledge. Despite their best efforts, individuals often neglect critical areas while managing their money. In this part, we will go through the five most important areas of personal finance.


“Do not save what is left after spending, but spend what is left after saving,” Warren Buffet has remarked. This is certainly excellent advice. You never know when the financial disaster may strike. As a result, it is preferable to be prepared.

Savings allow you to remain cool in such times and seek a solution. According to experts, your ideal savings should match your six-month costs.

Previously, the most popular alternative for saving was a “Saving account.” However, many consumers are now turning to debt products such as liquid funds to save.

This movement is due to a variety of factors. First and foremost, liquid funds have less credit and interest risk. Furthermore, you may simply withdraw money in a short period of time. Furthermore, although there is no assurance, these products generate higher returns than a savings account.


“Successful investment is about managing risk, not eliminating it,” remarked Benjamin Graham. Many individuals mistake saving and investing for the same thing. They are not, though.

You are essentially utilising your money to earn more money when you invest. There are several investment possibilities accessible in the market, including mutual funds, real estate, and the stock market.

To choose the best investment possibilities, divide them into three categories: short-term, long-term, and mid-term. Choose the one that best meets your needs, time range, and horizon.

Financial Security
According to WHO, financial security is at the core of Universal Health Coverage (UHC). It provides a safety net for you and your loved ones if properly picked. The idea is to plan ahead of time and combine your resources to avoid financial hardship.

Financial protection guarantees that unforeseen events do not jeopardise your savings and investing goals. Insurance is a kind of traditional financial security. In general, four kinds of insurance coverage are required for a person. There are four types of insurance: term insurance, health insurance, mortgage protection, and personal accident insurance.

Tax Strategy

You may save money on taxes by making the correct investments and purchases. There are around 70 exemptions and deductions available in India that may be utilised to reduce your taxable income.

Sections 80C and 80D of the Income Tax Act may allow you to save a significant amount of money on your income. Section 80C allows you to lower your taxable income by investing in tax-saving instruments like as EPF, PPF, NPS, NSC, and so on.

Section 80D, on the other hand, permits you to defer paying taxes on the money you pay as a premium for your and your family’s health insurance.

Retirement Strategy

“We can’t put off planning for retirement till later.” “Now is the time to plan.” Bob Reid has rightly explained the importance of having a retirement plan.

Unless you want to be a burden to your children, you should start thinking about retirement now. This is due to the fact that you never know when you will be able to quit working.

Increased life expectancy and recurrent inflation have increased the need of having a retirement plan. Investing in reliable sources of income may be the greatest alternative. Consider life insurance annuities, rental income, and mutual funds for your retirement strategy.

How Should You Manage Your Personal Finances in the New Fiscal Year?
Now that we’ve covered the essentials, we’re ready to arrange our personal finances. We’ve compiled a list of suggestions to help you arrange your personal finances in the new fiscal year.

Begin Early

“Haste creates Waste.” If you’ve ever attempted to manage your money and investments in the last month of the fiscal year, you’ll understand this remark. Not only are you antsy during the last-minute rush, but so are investors. As a result, the odds of making the erroneous choice are greatest. As a result, it is best not to wait until March to arrange your budget. Starting early allows you to make more informed selections. Set up your financial strategy for the month of April.

If you want to invest in PPF or SIPs in equity-linked saving schemes (ELSS funds), you should do so at the start of the next fiscal year.

Create a Budgetw

It is important to live within your means. Plan your spending and savings for the next year early on. To make the best selection, review your past year’s revenue and spending.

Set your financial objectives and plan your cash flow appropriately. If you earned a large bonus, strive to pay off your debts in part. Our income and goals influence our financial strategy significantly.

This will assist you in tracking your expenditures. As a result, you can strike the proper balance between spending and saving. If you cannot reduce your spending, consider adopting smart spending methods such as loyalty programmes, credit cards, or certain applications.

Compete against your prior month’s budget. It would help you develop as a wise spender. Set objectives and work hard to achieve them.

Establish an emergency fund

This is the money you’ll use to cover unforeseen costs in “just-in-case” scenarios. Typically, financial advisers recommend putting 20% of each salary into this fund.

According to Forbes, you can set up an emergency fund in just a few steps. They are as follows:

  • Choosing a start date for your fund.
  • Redistributing certain funds from existing assets.
  • Make a monthly commitment.
  • Making a separate account for collecting.
  • Spend any spare money on this fund.

Determine your insurance requirements

Insurance is not just intended to save taxes; it is also intended to meet vital requirements. The start of the new fiscal year is an excellent opportunity to review your insurance coverage.

According to financial experts, your insurance coverage should be 10 times your yearly salary. It is also vital to assess your insurance requirements in light of changing life objectives, such as getting married, having a kid, or purchasing a home.

According to a Swiss survey, the majority of Indians are uninsured. The protection gap is over 83% broad. This implies that if the Rs 100 insurance cover is required, the policyholders will only spend Rs 17.

Human Life Value (HLV) methods may also be used to assess the appropriateness of your insurance coverage. These tools are accessible online and will assist you in determining your financial needs according on your obligations, increments, earning capacity, and age.

Take a look at your financial portfolio.

It’s usually a good idea to go through your investment portfolio at the start of a new fiscal year. Track the market performance of your current assets to see how it has evolved from the previous year.

If you have had any substantial life changes in the recent year, you should reconsider your investing approach. For example, if you are approaching retirement age, you may want to consider investing in a suitable retirement plan. Assess your requirements and invest appropriately.

Determine how you want to spend your yearly bonus.

If you have gotten an annual bonus, do not waste the money. Plan your expenditures carefully. For example, if you have a debt, you may payback it half or totally. If you have a kid, you may spend the extra on an excellent Children’s plan.

Even if you do not have such an obligation, this does not mean you may simply overspend. Try putting it towards your savings or an emergency fund. This will assist you in achieving your financial objectives.

Make a tax plan.

Planning your taxes before the start of the fiscal year is a terrific way to get your new fiscal year started. It is, in fact, an aspect of financial discipline. To begin tax preparation, you must first determine your tax bracket. Various income levels have different tax rates. You can quickly determine your tax outgo if you know your tax slab. This will assist you in determining your tax-saving needs.

To determine the potential for savings, first assess your current tax-saving assets. This is critical since there is a maximum limit for lowering tax outflows.

There are several tax-saving vehicles to select from, including PPF, NPS, tax-saving mutual funds, and so on. It is also critical to spread your tax investment across the year rather than just in the final month. However, it is also crucial to recognise that investing objectives should be generated from your financial goals rather than for tax savings.

Reduce your debts

It seems to be easier said than done. Who wants to be in debt forever? It just occurs. However, the Central Bank recommends specific debt-management techniques. They are as follows:

  • Purchase nothing that you cannot afford without a credit card.
  • Every month, pay down your credit card debt in full.
  • Concentrate on your necessities rather than your desires.
  • Plan a budget based on your financial objectives and needs.
  • Limit your collection of cards.
  • Keep a master spreadsheet to monitor your costs.

Keep an eye on your credit score.

In today’s environment, it’s almost hard to live without a credit card. However, it is critical to properly manage your credits. If you want to get a loan or mortgage, you’ll need to have a good credit score. You should strive to keep your credit usage percentage low by paying off your bill every month.

The FICO (Fair Isaac Corporation) score is the most often used credit score these days. Payment history (35 percent), duration of credit history (15 percent), quantities owing (30 percent), credit mix (10 percent), and new credit all contribute to your FICO score (10 percent ).

It’s also a good idea to sign up for credit agencies that provide you frequent updates on your credit score. This will assist you not just in spotting errors, but also in detecting any fraudulent activities.

Keep accurate financial records

It is critical to maintain your financial data organised at all times. This will assist you in tracking any differences later on. Traditionally, all bill and payment receipts are kept in a folder or drawer. This, however, raises the likelihood of missing or forgetting one or more of them.

There are already a variety of applications available to help you keep track of your expenses. These internet programmes assist you in separating old invoices and receipts from new ones. You may also set up reminders for forthcoming payments. This saves you the trouble of going through every document in your folder in search of one.


Before you begin to plan, it is essential to grasp the five major areas of personal finance: saves, investment, financial protection, tax plan, and retirement plan. Furthermore, managing your personal finances in the new fiscal year following the ideas described above will undoubtedly help you make the most of your available assets.

I hope you liked this essay and learnt something from it. Continue to come for more entertainment and education.

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