5 Things Money Smart People Should Do in April

In economic terms, the month of April is very significant as it’s the start of a new financial year. This means a fresh start for taxpayers, especially the salaried class. Sadly, whether you like it or not, most of us wait until the last days for our tax saving investments resulting in a mad rush and also a sudden drop in money.

Ideally, the month of April should be utilized to make smart decisions that would serve your financial goals for the year ahead. Here are 5 things money smart people should do in April:

Be Smart to Plan Your Investments Early

‘Tax’ and ‘Investment,’ two of the most dreaded terms for the millennial generation. This group is the one that procrastinates the most in taking short and long term financial decisions. They wait for the last two-three months of the fiscal year to plan for their tax saving investments.

• Here’s why these people should be smart and start investing early rather than waiting for the end of the year:
• Tax planning done in the nick of time leads to a lot of financial stress and decisions taken in haste often results in a bad investment.
• Tax savings are imperative and a paramount goal. But this goal should go hand in hand with your financial goals. Before looking at the various tax saving plans, one needs to ask themselves this very fundamental question – what kind of investment would fulfil my financial goals in the long run?
  “Better to be too early and have to try again, than to be too late and have to catch
 up.”
• Planning your tax investments at the start of the fiscal year gives you an abundance of time to make comfortable and well-calculated investments and also to review them and make the necessary changes if required.
• Early investments means earning more.

Be Smart to Turn Your Bonus Into Savings

The month of April is also the time when most salaried employees get annual bonuses after a performance review or annual appraisal. Most people would use their annual bonuses and spend on rich food, attending parties, going to the movies or indulging to splurge on unnecessary things. Of course, your appraisal or bonus is a reason to celebrate, and we won’t ask you to stop it altogether. But be smart and use a part of your annual bonus to invest in tax savings for the coming year. You’ll not only start early and see the benefits of compounding, but also prevent yourself from making unnecessary expenditures.

Be Smart to Earn More

There’s a famous saying, “The early bird gets more worm.” There’s a reason why that applies to investments as well. The sooner your start investing, the quicker you will see your investments giving returns – the magic of compounding will help you make more money faster.

Let’s take a quick example. Suppose you invest Rs 100,000 in April this year in a simple PPF account with a 7.9% interest rate. Remember this rate is almost twice of what you would have got in your savings account but also remember there are other options that can give you a much better return (we’ll get to that as well). Okay, so by the end of the financial year, you will make Rs 7,900 as interest on your PPF account. If you would have rather started towards the end of the financial year, say, January 2018 then you would have earned only Rs 1,975.

Extra Tip: If you had rather invested in an ELSS (Tax saving mutual fund scheme), some of the top funds would have given you around 25-30% return helping you earn around Rs 30,000 for the year. That’s Rs 2,500 extra income each month, just for starting early!

Be Smart to Reduce Financial Stress

If you start early, you have the freedom to decide better and with much more mental peace. While this is good to reduce general stress level, this will also help to reduce the financial stress on your accounts. If you plan to invest in an ELSS or tax savings scheme, you have the option of pumping in a small amount each month rather than a lump sum payment in the beginning. SIPs or Systematic Investment Plans can help you achieve this. Not only will they help you distribute your payments over the year, but it will also help you reduce your risk because of market movements.

Be Smart to Axe Tax

Since it’s all about making a fresh start towards your financial goals for the year ahead, it’s time to be Smart and Axe Tax your surplus bonus money that helps you plan your taxes effortlessly in a simple manner. ‘Axe Tax’ by Sqrrl helps you pick some of the most optimal tax saving plans that provide the best returns with a minimum lock-in period. The entire process is flexible and hassle free. The cherry on top is that you get all your investment statements essential for tax filings delivered right to your inbox.

Make choices that are beneficial and comfortable at the same time. On this note, we wish you all the best for a great financial year ahead.

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