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It is crucial to build an emergency fund of three to six months expenses and put it in a fixed deposit or a short term debt fund, so that this money could come handy in case of contingencies.

Financial year, 2015-16, has just begun and this is the best time to plan your finances and tax, instead of waiting till the end of the year. If you wait till the end of the year, and then invest in haste, you may go wrong in choosing the right products for investment and save in taxes, for which you may regret later. Yes, the early bird catches the worm

Choose a financial planner: If you are in a dilemma as to where should you invest, which is the best product for you, which are the products that you give you good returns, approach a financial planner. While choosing a financial planner, check his credentials/background well. If he/she is a financial advisor registered with the Securities and Exchange Board of India (SEBI), go ahead. Also check his past record, and pay only for the advice given.

Make note of expenses/investments: Experts always advice that you must first save and then spend what is left, not vice-versa. By making a note of all expenses, such as household expenses, total insurance premiums to be paid, Equated Monthly Installments (EMI) on your home loan, your contribution to employee provident fund, child’s education fees, and other miscellaneous expenses, you can then decide on the quantum of amount to be saved and invested wisely.

Build an emergency fund: It is crucial to build an emergency fund of three to six months expenses and put it in a fixed deposit or a short term debt fund, so that this money could come handy in case of contingencies.

Invest: Once you have made provisions for all the expenses mentioned above, invest the rest. You could choose a combination of debt and equity products like bank fixed deposits, Public Provident Fund, Equity Linked Saving Scheme (ELSS), National Saving Certificate, mutual funds and so on, depending on your age, amount you can invest and risk appetite. If you a senior citizen, experts suggest you invest in bank fixed deposits or look at other senior citizen saving schemes as the rate of return is fixed. If you are looking at investing in a Systematic Investment Plan (SIP), this is the right time to begin as we are in the beginning of the year.

If you plan your finances and taxes at the beginning of year, you will have sufficient time to look at the right products, which will suit your needs, and save taxes using the right instruments, instead of waiting till the last moment. It will also help you to plan well for your goals and achieve them. So go ahead, sooner the better...