5 financial tasks to perform before you ring in 2023

As we stand in the last month of 2022, the deadline for our to-do tasks this year is approaching fast! In this context, let us discuss the financial tasks you need to perform before the new year rings in!

Health check up of your finances

As the year passes, you need to look back and introspect how your financial life has fared since the start of the year. Were you able to save and invest the proportion of income you decided on initially? Did you follow your budget each month, especially during the festive seasons? Were you able to control impulsive spending? Did your income increase in sync with your expenses? These are essential questions you must answer and improve upon as you enter the new year!

Asset allocation review

Were you anxious when the Russia-Ukraine war broke out, and the stock markets were volatile for the whole year? Or were you able to sleep peacefully? If your answer to the former question is ‘yes’, then you probably need to have a relook at your asset allocation. If volatility is something that you fear, you probably need to decrease your overall equity exposure and increase the fixed-income asset portion. In the end, peace of mind is more important than having a high equity exposure because of fear of being missed out.

Check the status of your emergency fund corpus

As the new year rings in, you should have a look at the state of your emergency fund corpus. If you do not have emergency funds, you should start planning immediately. And if you have started to contribute some money to your emergency fund, you should evaluate if you are going as per your target and by when will the complete fund be in place. The amount of the emergency fund corpus can differ for everyone, but it can be somewhere between 6-12 months’ worth of your expenses.

Re-Look at your insurance plans

If you do not have life and health insurance, this is the first thing you should rush for! Whereas if you already have them in place, you need to check if the sum insured is appropriate considering the growing income of the earning members in the family. As per a survey, only 17% of Indian millennials (age 25-35) have bought term insurance. Whether there’s a need to add appropriate riders to the plan or not should also be considered.

Ensure all nominees are in place!

Next up, ensuring that all nominees are in place is of utmost importance. Be it your insurance or investments, keeping nominees in place will ensure that the money flows to the intended individuals without legal hassles in your absence.

These critical financial deadlines should be on your wish list before 2022 ends. All these tasks will ensure a healthy financial life as 2023 arrives in just a few days!

Anmol Das is the smallcase manager & Head of Research at Teji Mandi