5 Financial Resolutions to start New Year 2018
Last Updated : Jan. 2, 2018, 3:36 p.m.
If you wish the year 2018 to be counted among one of the most remarkable years of your life then you should get going right now. Financial security gives us true peace of mind. There could be nothing better than starting a New Year with resolutions, which can help you in creating a better financial future for you and your loved ones. Here are some worthy financial resolutions for you to go for.
Get adequate Financial Protection : Despite all the hard work, it may take a lifetime for you to achieve all your life goals and save enough for your retirement. However, the family remains vulnerable to an uncertain future if something happens to you during your earning phase, more so if you are the sole earning member. You should have a comprehensive financial protection for your family in the New Year 2018 by taking adequate insurance cover against your life and health. In your absence, a good life insurance cover can help your family in maintaining the same lifestyle and fulfilling all life goals, just like you wished. Health insurance, on the other hand, can help you and your family to get the best possible medical treatment. It saves you from any financial distress due to health issues.
Prepare your Budget : It works for you in many ways when you prepare monthly and annual budgets that include all your possible incomes and expenses. You get a broader idea of your overall financial standing and cash flows. This awareness helps you in making informed financial decisions. Moreover, when you are able to identify future cash flow challenges you can start planning in advance to manage them through cost-cutting or borrowing. Often a budget gets derailed due to unforeseen expenses like medical exigency, unplanned travel, function in your family and guests coming to your home. Therefore you should make provisions for a contingency fund so that your budget is more durable and flexible.
Assign a Saving Target : Long-term goals like buying a house, children’s education and retirement corpus require you to do a huge saving. You cannot save it within a short span of time, therefore, you should start with small regular saving. Early start may help you save big over a long term. An ideal way to inculcate the art of saving is to have a monthly saving target like a certain percentage of your income. In the New Year 2018, you can keep this amount aside from your monthly income and then manage your expenses with the remaining amount. You may not hit the bull’s eye every time but it will keep you within a manageable distance with your saving targets.
Not to Use Revolving Credit : Payment of interest on the borrowed money is like leakage from your saving basket. It prevents you from saving a higher amount of your life goals. Revolving credit of your credit card is one of the most costly borrowings, which you must avoid. In the New Year 2018, you should make it a point to pay the entire outstanding amount by the due date. In case, you cannot clear it by the due date, as a last resort you should convert these into EMIs to have lower interest outflow.
Increase your Financial Literacy : Lack of understanding of financial products may prevent you from getting optimum return on your hard earned money. You should make your money work as hard as you do. In the New Year, you can increase your financial knowledge. Equity has outperformed many other asset classes over the long term so you may start this year by increasing your knowledge about equities. You may then graduate to investing a part of your portfolio in equities, possibly through mutual funds.
