Important Financial Steps to Take Before the End of the Year

The year is starting to wind down and we have just a month left to achieve all those goals we set for ourselves back in January. As the year draws to the close, its the perfect opportunity for us to take a moment and reflect on all the ups and downs we've experienced over the last 11 months. Now is also the ideal time for us get all our finances in order, so that we aren't left scrambling when the financial year comes to a close.

If you aren't quite certain about what you need to do to get your finances on track for next year, here's a look at 4 important steps you should take before the clock strikes 12 on the 31^st:

1. Plan for Your Taxes

   Yes, there's still a few months before we hit that tax planning deadline, but do you really want to leave something this important to the last minute? We didn't think so. You have a few months in hand to carefully consider all the options available to you. Start by looking at the way your finances have evolved over the course of the year. If you've recently received a bonus or a raise, you may have to make a few adjustments to your investments to still avail the same tax rebates you've been enjoying so far. If you haven't planned for your taxes at all, consider the investments you could make over the next couple of months.

2. Rebalance Your Portfolio

   One of the most common mistakes that investors make is ignoring the need to review their investments every few months. At the end of the year, take a moment to look at how your investments are faring. Check if their progress is on track. If a particular investment is providing you with significantly lower returns than anticipated, you should consider shifting your money around. Perhaps find a safer investment option that provides consistent returns over time.

   Considering a Unit Linked Insurance Plan (ULIP) is a good option. This type of investment allows you to select market instruments based on your personal risk appetite while also providing life cover.

3. Review Your Insurance Needs

   We cannot stress the importance of having insurance enough. Life is unpredictable, and a good insurance policy is the only thing that can provide you and your family with some financial safety during trying times. In fact, according to Maslows hierarchy of needs, safety is one of the most important needs to be fulfilled. It comes before our need for friendship, love or belonging.

   If you don't already have insurance, then please reconsider your investments so that you have enough money left over to purchase a policy. Typically, it's a good idea to have both health and life insurance as they provide cover for different kinds of situations.

   If you already have insurance, then its important to take stock of what kind of plan you have and see if you need to make any adjustments. This is especially crucial if your parents have recently retired, or if you've decided to tie the knot or had a child over the course of the year. In such situations, you now have more dependents relying on you than before, and you need to consider their financial needs along with your own. You may have to add more people to your existing health plan, or increase the cover on your life insurance.

4. Do a Good Deed

   Once you've got your own finances in order, perhaps you can do something nice for the people around you. Should you have a little extra savings in your account, you can consider giving the money to charity. You could help fund the education of an underprivileged child or even provide meals to those who have less than you do. You can choose any cause that you're passionate about and make a small donation, which will help make a difference in the world.

   Once you've done what is necessary to ensure that your finances are in order, it's time to put on those party clothes and celebrate the beginning of a brand new year.

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