7 ways to improve your personal finance this New Year

As we usher in the new year, everybody hopes for an enriching life in every aspect and in order to better your personal finance you can abide by these simple ways: #13; Term insurance plan that provides financial security to your family in your absence should be the first investment after you begin to generate financial resources for the family. The cover for an amount that replaces your income which is further adjusted for inflation can be best chosen.Advertisement With digitalization, gaining knowledge on financial matters is no more a difficult task, as now several personal finance portals offering useful information on financial matters have cropped up in recent time. Nonetheless, you need to make sincere effort to gain basic financial know-how which will ensure that you end up formulating a financial plan that meets all you financial goals objectively in full and in a timely manner. The habit of regular and consistent saving from earlier days creates for you a substantial corpus that can come in handy for meeting different financial goals and obligations. The accumulated corpus could also be put to use after retirement. So, engage in saving some amount on a regular basis depending on your disposable income and realize huge returns on account of compounding in due course of time. Monitoring of ones finances on a regular basis is a crucial exercise for determining the performance of different financial instruments in the portfolio. The performance then determines the way one should re-balance the portfolio in order to achieve the set financial goals i.e in case equity is under-performing gold, funds can be invested in gold.Review of the portfolio with updated information also helps in complying with the income tax laws such as paying capital gains tax on realized capital gains or claiming deduction in lieu of different investment while filing returns. Regular review of bank account statements, auto debit in respect of certain dues and payments helps in tracing any discrepancy. In case you are trapped in huge debt on credit cards or other loans, you should make a judicial attempt to know how much dues can you realistically clear and go for settlement with your lending institution. The settlement option allows you to negotiate with your lending entity and pay a lump sum amount which is less than the total outstanding loan and interest amount. Also, it makes sense to first get rid of all the debt obligations instead of heading for any financial investment. A contingency fund for covering 3-6 months expenses in case of any contingent situation should be necessarily created as then you dont need to liquidate your other investments for meeting the then due financial obligations. Still many financial documents such as insurance policy document, certificate of fixed deposit, property papers and deed among others are received in physical form. Record-keeping in case of some is definitely required until the maturity of the term of the particular account or even after to account in different financial statements while some others should be preserved to make claims or as proofs in case of any wrong accounting by the financial institution. Also, ensure nominee for the different financial accounts are aware about where the financial documents are kept. The documents should however be safeguarded against unauthorized access.