Introduction

Hello friend, the new year has just started for us, that is, when you say New Year, you think of January, but January is already a long month away, I mean Financial New Year.  It means the financial new year starts in April and ends in March. so that’s why we are saying this gap is our financial year. So this financial year from 2024 to 2025 allows us to change our last financial year’s mistakes in the financial year. So read this blog till the end if you want your finances to fit correctly.

1. Postmortem Your Past

Many people know what the problem is, they know that there is a problem and avoid that problem. Just like an ostrich thinks that no problem will come until it puts its head in the ground, some of us think that if we don’t check our finances, we won’t have any problems. That is, if you make a financial mistake in the past and now you remember and leave that financial mistake uncorrected, you will have a bad year this financial year as well. If you identify what you did wrong in the past and correct that mistake in this financial year, then this financial year will be a good year for you. To be clear, whatever big mistake you have made in your past i.e. almost 100% loss, forget it and travel right towards your goal this financial year.

So, if you take personal measurements of what we are doing right and what we are doing wrong this financial year, this financial year will be a good financial year for you. Set a few small goals in this financial year. That is, we already set a goal in the last financial year. If you miss something, set a goal that you will do everything in this financial year.

2. Calculate your fixed cost

What Ramit Sethi, who wrote I Will Teach You to Be Rich, is trying to say If you want to bring your finances under control, it is correct to put a conscious spending plan. This Conscious spending Plan is not a typical plan for us. To make a conscious spending plan, first, you need to know what is the monthly fixed cost. It comes under your Needs like rental, grocery, Medical Bill, and many more like that will include some things like this. Some of these basic needs should not exceed 50 to 60 percent of your monthly salary. Only if this is the case, you can reduce your fixed cost and not only that, but you can also make a lot of contribution to your future.

3. Optimize your taxes and investments

Diversify your investments to reduce risk, and allocate your money across multiple asset classes, such as equities, bonds, real estate, and commodities. Take Professional Advice,  Consult with a financial advisor or tax professional to create a customized plan based on your goals and financial situation.

To save your taxes through section 80c, first choose a good ELSS fund and start investing in it. If you have not taken term Life Insurance yet, take it and start investing your money in it. By doing both, you can save up to 1.5 lakhs in certain months. If you can take some of these types of health insurance, you can save up to 75 thousand in taxes. So know how to save your taxes by using this tax section properly. So when this type of financial year starts, health insurance and then ELSS fund learn a lot about how to save tax. 

4. Plan your savings and automate everything 

In the second and third steps, we saw our basic needs and some of the investments required for it.  What we are going to see now is our future savings. From 40% of our monthly income, we set aside 20% for our future. It is in this 20% interest that our real wealth is created for us. If you can’t invest 20% in starting then start investing 10% with your own, But if you can’t invest even that 10%, you need to rethink your life. So start investing as much as you can for your future.

Automate Savings, Set up automatic transfers from your checking account to your savings account each month.

Budgeting, Create a budget to track your income and expenses. This helps identify areas where you can cut back and save more.

So plan accordingly to save your savings and much more.

5. Create a conscious spending goal

It is at this step that we spend our finances to enjoy our lives. So, if we keep adding our amount and saying that we can enjoy it after our age, we don’t know how we will be at that time. So we should do whatever we want to do with the 20% off investment is required that we kept in our salary. Determine how much you want to spend in each category. Be realistic and flexible, but also aim to challenge yourself to make meaningful changes. Periodically review your spending to see if it aligns with your conscious spending goals.

Adjust as needed to stay on track. Before making a purchase, ask yourself if it aligns with your values and priorities. This helps prevent impulse buying and encourages intentional spending. So what you need to know from this is to spend and set a limit for it and Feel your favorite things guild free.

6.Earn more

To earn in tax savings, you can take advantage of tax-advantaged accounts such as retirement plans (e.g., 401(k), IRA), Health Savings Accounts (HSAs), and 529 college savings plans. Maximize contributions to these accounts to reduce your taxable income and potentially qualify for tax deductions or credits. Additionally, consider tax-efficient investment strategies and consult with a financial advisor to optimize your tax-saving opportunities.

Conclusion 

As we begin the 2024–2025 fiscal year, it is imperative that we take note of the financial errors we have made in the past and actively work to correct them. We lay the groundwork for a stable financial future by reviewing our past, figuring out fixed costs, planning savings, planning taxes and investments, setting conscious spending objectives, and looking at ways to increase income through tax savings. Recall that proactive money management, frugal saving, and well-informed decision-making are crucial. So let’s take advantage of this chance to take charge of our finances and create a wealthy future.