End of the year savings checklist

As we approach the final stretch of the year, it’s natural to reflect on our habits, be it personal, professional, or financial. On the financial front, a savings checklist is a simple way to take stock of where your finances stand. It helps you understand what worked and what needs tweaking for the next year. It lets you enter the new year with a sense of calmness and conviction. Refer to this simple guide on preparing a year-end savings checklist to stay financially ahead.

An important first step: Review your accounts
 

A good place to start is understanding where your money currently sits and making the required adjustments. A simple review of your accounts can reveal things you might have overlooked. Here’s how it works:

• Check your savings balance and investments
   

Your savings and the income they’ve generated through investments dictate your financial health. Get a low-down on your bank account balances through downloadable statements. Check the inflow and outflow to understand how you’ve fared. Review how your investment portfolio is doing and decide if it needs rebalancing.

• Update or close unused accounts
   

Digital banking’s convenience can make it easy to accumulate accounts and lose track of them. With the year-end savings checklist, you can pay attention to such inactive accounts. Update the ones you still use with KYC details and close the ones you don’t. This helps prevent small charges and clutter of maintenance notices.

• Review interest and charges
   

Opening a savings account is not a one-and-done process. You can always upgrade if you come across a better alternative. This starts with reviewing the interest rate on your accounts and the various charges they attract. If you find them unsatisfactory, you can compare and make a switch.

Next Up: Plan for tax & investment goals
 

Once you’re done setting your accounts in order, the next area of focus in your savings checklist is taxation and investments. Plan to optimise your tax benefits and portfolio for long-term growth. Estimate your tax liability, invest in tax-saving instruments and move idle funds to high-yield savings or FDs. If you have surplus funds lying in your savings account, consider shifting them to a high-yield savings account or FDs. Banks like IDFC FIRST Bank offer such accounts with interest rates going up to 7% p.a. You can open these accounts digitally with minimal KYC formalities. 

The high-interest rate savings account attracts zero charges, and the FD comes with zero penalty on withdrawals for senior citizens.

Besides parking a lump sum in FD, IDFC FIRST Bank also provides an alternative of an auto-sweep feature. This feature helps you transfer the surplus in a savings account to an FD while maintaining the liquidity of a savings account.

• Set savings targets for next year
   

There’s always room for improvement in your financial profile based on your new goals and life updates. Hence, it helps to prepare for the next year with new targets. This can include building an emergency fund, investing more consistently, building more income sources, adjusting your budgeting goals, etc. Setting such purposeful targets gives you a clear direction.

Smart moves to complete the year-end savings checklist
 

As you wrap up your savings checklist, it’s worth paying heed to a few simple but easily missed tasks. These are quick moves that help you leverage opportunities and simplify financial management.

• Track all accounts’ activity on one app
   

With the ease of mobile banking apps and personal finance trackers, you can track all your financial products in one place. Whether it is your savings account, credit cards, investments, or loans, you can monitor transactions in a single app. This simple habit helps organise your cash inflows and outflows and lets you better manage your money.

• Review the management of debts
   

It is a good practice to reduce liabilities as and when possible. Hence, this should be an essential part of your year-end savings checklist. Check your ongoing EMIs and credit card dues. See if you can close the outstanding balances early without incurring a high penalty. Even small adjustments can make more room in your monthly budget and reduce financial stress.

• Revisit your insurance plans
   

Insurance providers are known to upgrade their offers for a competitive edge. Hence, the health, life, or vehicle insurance policy you bought years ago can be upgraded. Review your current coverage and premium cost and compare with other providers. If you find better deals, port your insurance for maximum value at a low cost. Also, track the policy renewal date to prevent last-minute hassle.

At a glance:

Final words
 

Now that you understand the essentials of a year-end savings checklist, you can close this year with more clarity and preparedness. All the steps essentially focus on tying up loose ends and setting up your finances for a better future. It is a good method to stay on top of your savings, investments, taxes, expenses, debt, and insurance. So, make this a ritual and enter the new year confidently!