As the New Year has arrived, there is a festive cheer in the air. People also sound very determined to achieve their goals. This optimism is not only limited to personal goals like to quit smoking or loose 5 Kgs but they also set financial goals like to save enough money to buy a car at the end of the year or to pay up their credit card debt.
Whatever your goal, just resolving to do something is not important. What is more important is to follow through. Also while setting your financial goals you should not try to over-achieve. In such a scenario, it all breaks down like a house of cards. Therefore, it is important to stay realistic. In this article I will look at the top financial resolutions which should form a part of every person’s New Year resolutions to have a healthy financial situation.
MAKE A FINANCIAL PLAN. The most important resolution for a person should be to make a financial plan. A financial plan enables a person to put his finances in perspective. Once you know what your earnings, expenditure, savings and investments are, it is easier to plan the rest of your financial goals for the year. Financial plan enables you to take control of your money and to protect you and your family from any unforeseen calamities. It also helps you plan better how to achieve your financial goals. Therefore, having a financial plan should be every person’s number one financial resolution for the year.
MAKE A MONTHLY BUDGET. Your second resolution should be to make a monthly budget and stick to it. Once you know how much monthly inflow of cash you have, it is important to allocate how much you are going to spend and how much are you going to save. There is no point in living from pay cheque-to-pay cheque. And this is only possible if you stick to your budget. There are various online tools available to help you achieve the same.
PAY OFF DEBT. It is important to keep paying off whatever debt you have accumulated. This could be in the form of credit card debt or loans taken for various reasons. Also included in this category are your monthly bills. It is important to pay your monthly loan instalments on time. You should set a ‘bill paying date ’in your calendar. On that particular day it is helpful to look at all pending bills to make sure you have not skipped making any payment. If you have accumulated debt on many credit cards, it is best to start paying off the debt on the card that has the highest rate of interest. But at the same time make sure that you keep making the minimum payment due on each card.
GET INSURANCE. You should get the right insurance policy that works best to suit your needs. This is important to shield you against any unforeseen circumstance and to make your future and the future of your loved ones secure.
INCREASE YOUR SAVING. This in turn translates into paying yourself first. Like you set out an amount for each month to make payment for various needs, similarly you can set automatic transfer of funds to a separate account, so that as soon as your salary comes in, a part of it gets transferred to another account in the form of saving. This helps as when you do not see the money, there is no temptation to spend it. Similarly you may set up a retirement fund to help you ease into that phase of your life.
PROTECT YOURSELF FROM INTERNET THEFT. Even though at the outset this may not sound like it is relevant to you, and it won’t happen to you, but internet theft is as much of a reality as getting your chain snatched on the road. There are various types of financial frauds that take place on the internet. It is important for you to never give out your financial information. Also as more and more financial transactions are being done online it is important to safeguard your online identity. Keep changing your passwords to keep your money safe.
If you set your financial resolutions realistically and have an intention to keep up with them, it would ease the stress levels of everyday life. It would also mean having a more secure future.
This article is written by Mr. Mayank Gupta who blogs at NineMillionDollars.com who offers financial plan services