The start of the new year gives us an opportunity to set new goals and commit to better habits – basically, it’s the thought of ‘It’s a new year and a new me!.” But as the days progress the excitement and motivation to stick to these goals and habits drastically reduces, in fact unofficially Jan 17th is denoted as the “Ditch New Year’s resolution day”.
The most common goals people commit to in the new year are ‘getting fit’ and ‘improving finances’. So, if you are looking to improve finances in the new year, here are three important financial actions for the first quarter of 2024.
Estate Planning: Make January 2024 the month in which you will focus on your estate planning. Estate planning in simple terms is establishing who will eventually receive and benefit from your assets when you are gone. Estate planning is crucial irrespective of age or wealth.
Some of the common estate planning documents are:
- Will: A Will is a legal document that expresses your wishes on the distribution and management of your property and other financial and digital assets.
- Power of attorney (POA): A legal document that gives authority to another person to act on one’s behalf on certain matters.
- Living will: This legal document specifies the medical actions to be taken if one becomes incapable or unable to manage finances and other decisions on their own.
National Pension Scheme (NPS): Make February 2024 the focus month for the NPS. NPS is a market-linked scheme that helps in retirement planning. Any Indian citizen in the age group 18 – 70 years, can join the NPS. NPS has tax benefits under sec 80 CCD (1) and 80 CCD (2).
Under 80 CCD (1), an additional amount invested in NPS of Rs 50,000 (which is in addition of 1.5 lakh in 80C) is allowed as a deduction, if you have opted for the old tax regime. For withdrawals at retirement age, 60% of the total corpus can be withdrawn tax-free and the remaining 40% is to be used for annuity purchases. The annuity income in the subsequent years will be subject to income tax as per the applicable tax slab.
Using technology for tracking finances: Make March 2024 the focus month towards technology. Gone are the days when making notes or manual entries in a book were sufficient to track one’s finances. In today’s fast-paced lives, we usually hear people saying “I don’t know where all my money goes” or “How do I start my savings journey?.” The answers to such questions are technology and apps. Technology today can help one track expenditures and also investments. Expense trackers track multiple outflow streams such as UPI, credit card, debit card, net banking, and cash transactions. Expense tracking also allows one to stick to budgeting and plan savings and investments and aid financial planning. Use this for yourself, and introduce your spouse/partner to these tools as well.
In conclusion, only about 1% of individuals actually end up committing to their New Year resolutions. We hope this series of blogs will help you improve your finances throughout the new year 2024 and tick off the financial fitness goal for 2024. We will come back with actions for the other quarters of 2024.
Standard warning: Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI, membership of BASL, and certification from National Institute of Securities Markets (NISM) in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
The securities quoted are for illustration only and are not recommendatory.
This information is only for consumption by the blog reader and such material should not be redistributed.