It’s almost a month into the financial year and your first salary is due in a couple of days. So is your investment declaration to your employer. It’s easy to just ignore the mail sent by your HR and claim a refund later. But planning your investment right from the start of the financial year helps you to earn some interest on the investments made now, be financially disciplined and also reduces your burden at the end of the year.
People think investment declaration as a difficult process but it’s not rocket science. It’s just managing your own money. Here are few tips for you to make your work easy.
Improve your understanding
Before you plan to submit an investment declaration know about the benefits available to you. The regular expenses can also help you save taxes. Tuition fees, rent, payment for loans, medical expenses for parents who are senior citizens and travel allowance are just a few drops in the ocean of benefits available to you. Calculate how much more you need to invest to save tax and evaluate the investment options available to you that can save you from paying tax. ELSS mutual funds are considered the best among all the other tax saving investments available to you.
Have financial goals and track your progress towards them regularly
Have goals and invest your time, effort and money towards achieving them. Track your progress regularly so that you know where you stand in your financial plan. Invest money regularly towards achieving your target to avoid the burden later on in life.
Loan clearance vs Investment
If you have any loans to pay off and you want to invest to save taxes then, evaluate the returns from investment and compare it with the interest you pay for the loans. If you have investments that reap 10% interest but you pay 15% interest on your existing loans, I suggested to pay off the loan first and think about investing later.
File the proof carefully
Ensure you keep all the investment and expenses related proofs carefully filed up so that it will help you when you need to submit them at the end of the year.
Investment declaration is only a roadmap for your financial journey for the rest of the year. One can always take a detour and do not have to follow it as planned. But planning will help you to kick-start your journey earlier than intended and helps you distribute your cash flow throughout the year. Apportion your investments all through the year rather than waiting until the end.