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Bounced EMI’s can result not just in operational hassles, but in a drop in your credit score as well
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The start of the month is as great a time as ever to revisit your personal finances and plan ahead for the next thirty days. Here’s a simple five-point start-of-month personal finance checklist that will keep your fiscal fitness levels healthy!
Budget!
Yes, the boring old budget will always remain the bedrock of your healthy personal finances. Maintain a simple spreadsheet where you factor in the cash spends (including your credit card outstanding payments due) that you will be incurring in the next 30 days. Go really granular and use this as an opportunity to cut out unnecessary spends and plug money leaks, if any. Don’t forget to factor in quarterly, bi-monthly or half yearly payments such as water and gas bills. Split your projected monthly spends as “cash” and “credit” and make sure there’s adequate provisioning in place for both.
Check your bank statement
If you’ve got EMI’s running from your bank accounts, you’d want to ensure that they’re adequately funded. Bounced EMI’s can result not just in operational hassles, but in a drop in your credit score as well. You’d want to ensure that your loan schedules keep getting cleared like clockwork, month in, month out, so that your personal credit score stays in good shape and that you have access to emergency borrowing at all times, if the need were to arise.
Check in on your portfolio
While it’s true that checking your investment portfolio too frequently isn’t a healthy habit, a quick monthly recon is in fact, a great idea. Check in with your Financial Advisor and take a quick lowdown on how your investments are performing vis a vis the markets, and also decide whether any action is required in terms of booking profits of deploying more money into equities. If you need any temporary liquidity to fund gaps in your cashflow, this would be a good time to plan your redemptions too.
Reconsider your subscriptions
Over time, it’s extremely common for us to pile on recurring online subscriptions to things like paid apps, smart tv channels, mobile based services and the like. These subscriptions are usually auto-renewable and stand good until cancelled; and can become a severe drain on your finances if left unchecked. For instance, you may have taken up a recurring monthly membership for an OTT platform just to catch up on a particular sitcom, but overlooked cancelling it after it ended. Keep your recurring spends on a tight leash by weeding out the useless ones at the start of every month.
Buffer for the unexpected
Don’t forget to buffer your budget for any potential large expenses that may come your way during the month. Things like emergency home repairs, the breakdown of your home entertainment system or other important appliances, or your domestic help asking you for a heft advance, can all set you back if you’re not planned ahead. Keep an adequate amount of excess liquidity in your account for these purposes and you’ll sail through the month stress-free!