5 Tasks To Tick Off Your Mid-year Checklist To Keep Your Finances On Track For The Rest Of The Year

Time really flies, doesn't it? It seems just a while ago that 2023 had started, and now we are at the halfway mark.

At this time, while many countries' stock markets are soaring high, some countries have been falling into recession. Besides this, mass layoffs, multiple bank failures and rising interest rates are among the causes of concern all over the world.

Amid these economic ups and downs and the fact that covid in itself has been a wakeup call about how uncertain life is, isn't it wiser to keep our financial life strong instead of just sitting and worrying?

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So, why not take this halfway point as an opportunity to look back at our financial life and tick these off the mid-year checklist to ensure our finances remain on track for the rest of the year?

5 Financial Tasks To Tick Off Your Mid-year Checklist

1. Make an emergency fund a necessity instead of an option

A financial emergency is what often makes us realise the importance of having an emergency fund or a rainy day fund.

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An emergency fund is one of the most important pillars of strong financial health, especially when uncertainties and recession fears are looming. That is exactly why having an adequate rainy-day fund is a crucial step if you do not have it already.

This fund acts as a cushion during financial emergencies that can be in the form of a sudden job loss, severe illness, disability, or significant pay cut. In all such adverse financial events in life that can temporarily hamper your income inflow, having an emergency fund can rescue you by helping you carry on with your recurring monthly expenses.

It is usually advisable to have an emergency fund with an amount equal to at least six months of your recurring monthly expenses. The recurring monthly mandatory expenses to factor into the fund are your rent, utility bills, loan EMIs, insurance premiums, your children¡¯s education fees, monthly investment contributions (like SIPs), etc.

2. Have Adequate Life & Health Insurance

Another thing to tick off your financial checklist as soon as possible is to have adequate insurance.

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If you still don't have life and health insurance despite the COVID pandemic and mass layoffs being massive wakeup calls, then we wonder what is holding you back from understanding the importance of these two.

Firstly, the primary objective of buying a life insurance policy is to provide a replacement income to your dependents in the event of your untimely demise. Make sure your life insurance coverage amounts to at least 15 times your average annual income. You can prefer purchasing term life insurance over other life insurance products as it provides large life coverage at very low premiums.

Secondly, in addition to term insurance, it¡¯s equally important to have health insurance. Click here to understand the benefits of buying health insurance.

Keep in mind that having a health insurance policy with adequate coverage reduces the risk emanating from rising healthcare costs. One should also remember that even if their employer provides coverage under group health policies, such coverage is usually inadequate to meet hospitalisation costs, and such policies lapse once they switch organisations. This leaves you without health coverage until you get covered through another employer-provided health plan.

3. Start Investing If You Haven¡¯t Already

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Many of us just shrug off the idea of investing, especially in the early years of our careers, and insist on waiting for the ¡®right time¡® to begin it. Ever wondered why that ¡®right¡¯ time never comes? Because there is, in fact, no better time to invest than right now! So wait no more and begin investing today itself. After all, ¡®time is money¡¯.

And still, if you feel unconvinced by the idea of investing right away, just remember that the sooner you begin investing, the more time your money has for wealth creation through the maximizing power of compounding interest.

Whereas on the flip side, the more you wait for the ¡®right time¡¯, the higher the chances of failure to accumulate the desired corpus in time.

4. Become Credit Ready For Better Deals On Loans & Credit Cards

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It's a no-brainer that a good credit score is no less than a financial asset nowadays. This three-digit numerical representation of your credit history, which generally ranges between 300 and 900, is important when lenders assess your application for loans and credit cards. A credit score shows your creditworthiness on the basis of your past credit card and loan repayment behaviour.

Click here to understand how credit bureaus calculate your credit score.

As your credit score helps banks and other financial institutions to assess your creditworthiness through past repayment history, it also indicates the degree of likelihood of you defaulting on the loan or credit card repayments in the future. A good credit score will portray you as more trustworthy, whereas a low or no credit score would make the lender more cautious when deciding whether to accept or reject your application. That is why you must remain credit-ready with a good credit score so that you are eligible to get a loan or credit card whenever the need arises.

So if you aren't credit ready yet, take this mid-year milestone as an opportunity to do so through a good credit score.

Wondering how to have a good credit score? These are the most important factors that affect your credit score. Also, make sure you are not practising these habits that may be harming your credit score.

5. Take Up Side Gigs For Passive Income

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Irrespective of what career you are into, whether an entrepreneur, engineer, doctor, journalist, or into any other career, it's likely that there is some hidden talent, creative outlet, or hobby about which you must be passionate, right?

Keeping in mind the mass layoffs and economic uncertainty looming all over, why not monetize your passion by turning it into a side gig? So if you haven't don't that yet, try ticking this off your mid-year checklist for sure. This can be a financial cushion and an additional source of income for you that can come in handy during financial uncertainties such as a recession. To learn in detail about various side gigs you can take up, click here.

For the latest and more interesting financial news, keep reading Indiatimes Worth. Click here.