Financial To-Do List For 2020 - Outside View by PersonalFN

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Financial To-Do List For 2020
Dec 31, 2019

As the curtains draw in on the year of 2019, here's a flashback of the major events that occurred over this eventful year:

  • The ripple effect of downgrading continued,
  • Blossoming of BJP lotus with a whopping majority in the Lok Sabha elections,
  • Unappealing budget,
  • Poor consumer demand,
  • Rising unemployment levels due to loss of jobs across key sectors,
  • Unseasonal rains leading to inundation in several parts of the country affecting the food crops,
  • Rising inflation due to higher food prices,
  • Waning economy-lowering of GDP rate,
  • Five successive repo rate cuts to uplift the gloomy economy,
  • Slew of measures announced by the finance minister-inclusive of corporate tax rate cut, infusion of capital,
  • PSU strategic divestments plans announced,
  • Surging gold prices
  • And global growth concerns...

Due to these events listed above, the markets have reacted-negatively and positively---currently and moving forward, scaling new highs. However, the probable volatility going forward cannot be ruled out.

Frankly speaking, all the events highlighted don't paint a rosy picture of the economy at the end of the year. As an investor, has it been a bad year financially for you as well?

It's time to take cautious steps while entering into the New Year, embrace the current facts, and ensure that you take full control of your finances well.

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Begin by drawing up a financial to-do list to sort out your finances and keep your investments in the pink of health. Let's look at what should you include in your to-do list ...

  1. Evaluate your financial status

    Begin your year by assessing your finances to understand your current financial status. Assess all that you own and all that you owe. Make a note of all your assets and current investments.

    Match your cashflow and check if you need to make a more stringent budget for optimum savings and better investments or if everything is on track to achieve your financial goals. And have a check on your debt obligation, it should not be more than 40% of your gross income.

    Do review your portfolio for tweaking, adjust the asset allocation if necessary. Avoid holding on to investments which no longer provide nourishment to your financial health. Replace the portfolio underdogs with the consistent performers after careful evaluation on qualitative and quantitative parameters.

  2. Set new goals

    Once you realise about your financial situation and if you have achieved some of your financial goals, for your new year set new goals. Ensure the goals are Specific + Measurable + Adjustable + Realistic + Time-based (SMART).

    Setting a financial goal is very important because it provides a purpose, meaning, and it is a roadmap to accomplish the envisioned goals. It is a key to effective planning. Make sure you maintain a worksheet for your financial goals for reference so that you can keep a track of it and review it later.

    In the entire goal planning process, make sure you don't ape what your friends and relatives do to accomplish their financial goals. Because as Lucretius has rightly said, 'One Man's food is another Man's Poison'.

  3. Have a regular savings plan

    Pablo Picasso rightly expressed, 'Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.'

    If you start working on your financial goals with a prudently drawn up financial plan in place, your goals are achievable. Accordingly, save more this year and save before you spend. Save to invest small amounts regularly in mutual funds, which will be light on your wallet and reduce the burden of investing a lump sum.

    If you choose systematic investments plans via direct route from your paycheck, it will inculcate regularity in saving and investing for your long-term benefit of wealth creation with the effective use of the power of compounding.

  4. Try to reduce the debt burden

    While cheaper bank loans may look enticing to accomplish your goals for instant gratification. Be smart with your loan repayments with auto-pay options to reduce debt and avoid getting debt overburden.

    You can minimize the amount of interest paid overtime with timely payments of your credit cards charges that have high interest rate. It is advisable to repay the outstanding dues in full every time your credit card bill arrives and always spend within your means.

    You should keep in mind your financial goals before taking up any loan on your personal balance sheets. Excessive use of credit can be detrimental to your financial health and credit score. Fix your finances and make some savings. Lastly, be cautious and avoid making any hasty decisions which might land you in a debt trap situation.

  5. Insure yourself adequately

    Insurance is a financial instrument meant to protect against risks. As an individual grows older, the number of physical ailments and emergencies also increase. Hence it is extremely important for you to have a suitable and adequate health insurance policy or mediclaim cover.

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  7. Pay bills on time

    Choose smart banking with autopay options to pay all your utility and credit card bills on time, to easily track all your expenses for better control. In this era of technology and plastic money, be smart, bank smart!Auto-pay option is best online option, where once you store the billers' details, the bill amount will be automatically debited from your account the following month. Hence, you need not worry, as the system records your bill cycle naturally.Remember, paying your utility bills on time can earn you credit points and in turn reflect a good credit score. Once your bills are paid online, you can easily track your expenses and tweak them as and when needed.

  8. Build a rainy-day fund

    Setting money aside towards a contingency fund will help you in case of emergency so that your other financial goals are not derailed. Emergency situations like loss of job, hospitalization, unexpected rise in your child's school fees, etc. can arise any moment and leave you high and dry.

    You ought to prepare yourself financially, whereby you possess a sense of security and strength to overcome such testing times.

    Ideally, up to 50% of the emergency fund should remain highly-liquid by keeping it in a savings account or a mix of a savings account and liquid funds with an instant redemption facility. And you must maintain at least 6 to 24 months of living expenses, including EMIs as your contingency reserve.

  9. Be prudent with your taxes

    Prudently engage in tax planning exercise to look beyond Section 80C to avail the tax-saving benefits and avoid higher tax deductions. For many, tax planning starts as well as ends with Section 80C of Income-tax Act, 1961. However, investing only in these investment instruments will not optimally reduce your tax liability. There are various ways in which you can save taxes. Hence, efficiently do tax planning.

    Note the deadline for all the tax saving reimbursements and claims from your employer. Ensure that you submit all the relevant documents for proof to avail the tax saving benefits and to avoid higher tax deductions. Also remember to file your ITR on time to avoid paying penalty for belated filing of your ITR.

    Don't look at look at tax-planning as just another annual obligation that must be fulfilled. All you need to do is follow some simple steps and the tax-planning exercise can be easily sorted out for its not that difficult.

  10. Begin planning your retirement

    If you want to retire rich, then implement paying yourself first, as Warren Buffett's quote--- "Don't save what is left after spending, but spend what is left after savings", rightly works magic if we save first for ourselves.

    As a thumb rule of saving money regularly-- at least 10% of your income, towards your retirement would be a prudent practice to create wealth in the long-term. This way you will invest with discipline and determination for your blissful retirement and to meet your other financial goals.

    Ensure you have enough money for your retirement and do not jeopardize it by worrying about money during the golden years of life, start early and plan your retirement today! Do not delay any further. Remember, the early bird gets a bigger worm.

  11. Seek professional advice

    Seeking professional expert advice helps you to create an optimum financial plan for your better future. The one aspect that goes a long way in helping you start a wonderful journey of wealth creation is seeking professional advice.

    Irrespective of where you stand in your finances, it is a wise decision to seek a second opinion. Sometimes you may overlook certain aspects when you create a plan on your own or lack some skill set. Therefore, it is advisable to pay for expert advice.


So, while you are about to step into a new year, ensure you do have a to do list. Do take a moment to evaluate your situation and goals. Don't get disheartened due to a bad financial year, instead focus ahead, set goals and act on the plan to achieve them. Remember with prudent Financial Planning you can achieve goals which otherwise look unattainable. This year approach a Financial Planner.

Do your homework and start your year by opening up to new possibilities and work towards your financial fitness this year.

PersonalFN is of the view that it is imperative for you to plan and save for all your life goals through a well-designed financial plan. Moreover, the earlier you start, the more of a corpus you will be able to accumulate.

We at PersonalFN are committed to providing you with unbiased and honest views and opinions on various personal finance issues that can impact your investments and finances. We have been providing personalized Financial Planning solutions to our clients to help them meet their financial goals and objectives for two decades.

Further, if you need superlative value assistance in financial planning, reach out to us on 022-61361200 or e-mail at .

We will be happy to help you 😊

Till then...

Happy Planning & A Prosperous New Year!

Author: Aditi Murkute

This article first appeared on PersonalFN here.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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