5 Things To Do At The Start Of The Financial Year

While it is pretty natural for all of us to feel a little less stressed at the start of the year, one exercise that you can in April to ensure the rest of your year is also stress-free is to review your finances.

This review will help you assess how you have done with your finances in the last year, where you stand today, and steps you need to take to set yourself up for success financially in the short and long term.

  1.  Review Your Goals

The start of the financial year is a good time to review your progress towards your goals.

The target amount of your goals might have moved up more than you had assumed when calculating the amount, you will need.

For instance, if you were planning to buy a car, the prices might have seen an above-average increase due to high input costs.

In such a scenario, you will need to recalculate the amount you will need to invest every month to have the amount you need when the time comes.

Additionally, if there is a big change in your life stage in the last year, you might have to rework the priority or add new goals.

  2. Review Your Portfolio

While investing for the long-term is the key to wealth creation, that doesn’t mean you should invest and forget.

A periodic review of your portfolio is essential, and the start of the financial year is the perfect time to do it.

A review will help you understand what funds have outperformed, which have performed as per expectation and which have been laggards.

And while removing laggards is tempting, you need to be careful how you approach making that decision.

Ideally, you should only consider those funds which have been underperforming for quite some time (say at least 1.5 years).

What is most important is that you define underperformance clearly.

A fund giving negative returns might not be underperforming if the entire category has 


So, you need to compare the fund performance vs. the category average.

For instance, if the fund has fallen, but that fall is less than the category average, then you might want to stick to it because of its superior downside protection capabilities.

Reviewing your portfolio is also useful when your goals change. For instance, you started investing in an Equity Fund when you were 10 to 15 years away from your retirement goal.

But now, you have almost reached your target amount and are only two years away from your retirement.

In such a scenario, you need to allocate a higher amount of this accumulated corpus to fixed income products.

3. Increase Your Monthly Investment Amount

Ideally, you should increase your SIP investment by 10% every year with a rise in your income. This will help you reach your financial goals faster.

You can also look at other investment avenues such as the National Pension System (NPS) that offers you the additional Rs. 50,000 deduction over and above the Rs. 1.5 lakh deduction available under Section 80C.

  4.  Review Life Insurance Needs

Following significant life events like marriage, becoming a parent, buying a house, etc., your responsibilities increase significantly. 

You need to make sure that your life cover is sufficient to cover all these additional responsibilities.

So, go back to the calculations you would have used to figure out the right cover for yourself, add the amount you will need to cover the additional responsibilities, and whatever extra cover you need, get that.

Remember, your cover should be enough to provide a monthly income to your dependents, settle all loans, and keep enough for future one-time major expenses like the education of your children.

  5.  Review Health Insurance Policy

Like life insurance, major life events like marriage and becoming a parent also call for the need to review your health insurance cover.

If you bought a policy before you get married, you would have, in probability, bought an individual cover and for an amount that will be sufficient for you.

Now with additional members in the family, you will need not only a more significant cover but also to make sure they are covered.

The most convenient way to achieve this is by converting your health policy into a family floater and increasing the cover.

This ensures continuity of the policy, and you don’t miss out on any benefits.

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