Doing a financial status check is imperative to stay updated on your financial health and make plans for the future. Many of us simply have a bucket list of financial goals that we set out to achieve but forget to regularly check our own financial health along the way. Here is a simple list that will help you periodically assess your financial status.

Can you pay up to Rs.1 lakh to cover sudden emergencies/unforeseen expenditure?

Most people will be hard pressed to suddenly put up this sum of money and here is where you have to strategically build a contingency fund. You can start with a sum of Rs.50,000 or the sum total of expenses for a period of 6 months. This money should be built up by investing in Fixed Deposits or other debt funds and should be partially present in your savings accounts as well. Along with invested in FDs scheme, keep something in your account so that you can easily access money whenever you need the same.

Are taxes taking a large chunk out of your income? 

You should take a look at your income tax returns to ascertain your net income and analyze your income tax return filing to see where you can save more money. You can invest in tax saving fixed deposits or other tax saving instruments in order to scale up the money that you have in hand after tax deductions.

Are you covered for needs after a period of 3-5 years?

There may be home or car purchases required after 3-5 years or other family expenditure. You should be covered for the same and should invest accordingly in Fixed Deposits or other instruments for building up a suitable corpus of your own. Fixed Deposits offer a good interest rate of growth and decent returns along with total safety of the investment.

Are you saving enough money for your retirement?

You should ideally have enough money to last you till the age of 100. You should invest in suitable instruments and build up a solid retirement fund. You should have this money in equity mutual funds and steadily switch to debt funds once you are retired. Inflation will impact your retirement corpus and you will not want a scenario where your savings lie idle in your bank account. You should get returns that match inflation rates.

Here is where you have to take risks with equity mutual funds. If you are risk averse, you can certainly opt for Fixed Deposits and earn decent rates of return on the amount that you invest. Let it mature over a longer period of time in order to harness the benefits of compounding.

Have you saved money for the education of your child?

In case your children are looking to get into college within 3-5 years, you should put this investment in a debt fund. You can start saving early by investing money in a fixed deposit and use the matured amount after a certain period of time to fund the college education of your children.

Are your savings increasing with the growth in your income?

This is something that you should always check since when incomes increase, expenses also follow suit. If you are still saving the same amount of money that you used to, there are chances of your goals getting pushed back. Saving more with an increase in your income is always the best decision.

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