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| June 28, 2019

7 Financial Resolutions to make and keep in 2018

It’s been a while since a lot of us have made and broken our New Year resolutions. The practice of setting goals which help improve your life and lifestyle is one that has been followed for a long time now. While New Year celebrations have abated, soon we will be facing the fiscal New Year; and it wouldn’t be a bad idea if you were to make some smart and prudent financial New Year resolutions of your own. Your resolve to achieve will of course depend on you and your financial situation, but these 7 financial resolutions will get you started on the right track:

1. Clear all your debts

Remember, irrespective of the kind of debt you have, a large part of the EMI goes into repaying the interest on the debt. The longer the debt continues the more interest you pay. Save up some money and start making extra principal payments to get out of debt faster. If you can foreclose a loan, do it.

The second part of this resolution is to prioritize your debts; not all of them are equal. Organize your debts by interest rates and try to pay off the ones with the maximum interest (mostly credit card debts) first.

2. Collate your past expenses

List out your previous expenses on a single spreadsheet and analyze your previous spends. Categorize and review them. Through a thorough analysis, you will see that there are a number of expenses that you could have easily avoided. Once you have a list of such expenses, make sure that you avoid making similar purchases in 2018.

3. Practice some control over your expenditure

When we talk about controlling expenses, it doesn’t always have to mean that you quit buying things that catch your fancy. It does however mean paying all your bills, on time, always. Paying your bills on time helps avoid having to shell out extra money as late fees and penalties. If you’re not that organized with your finances, you can try downloading some apps to help you make your payments on time.

4. Have a financial plan in place

Just saving money is not enough. You need to make an actual plan. Review your retirement portfolio and decide how much money your retirement account should have by the end of the year, decide how much your emergency fund should have, invest in mutual funds or stocks, and so on. Having a concrete financial plan in place is the key to it all.

5. Set a savings goal

Not many people spend the required time in setting their budgets. As a resolution, take out the time and plan out a realistic budget that you can actually stick to. And when you do that, don’t forget to account for your savings. Whether it is for investments, your retirements, or for a rainy day; you need to have a goal in mind about your savings as well. Simply saving wherever possible will not suffice, and will not keep you from dipping into your savings whenever you want to.

6. Invest in your future

A coalesce of smart financial practices, consider ways in which you can multiply your money via investments, save as much as you can, but don’t forget to think about your future. In that direction, keep adding to your skill-sets from time to time. Classes that help you acquire more qualifications to improve your job prospects are not just an extra expense, but a way to invest in your own future.

7. Review your insurance and covers

There are many insurance products available in the market, from health insurance to home insurance and personal accident covers. These insurance policies act as a financial backup against unexpected situations that could otherwise drain your savings. Select a time in the year when you review your insurance portfolio; the end of the fiscal year could be a good time to do so. This period is also when a number of insurance companies offer discounts and offers on their products, so make sure you keep a tab on it.

Plan well, stay disciplined, and keep at it. The sense of satisfaction you’ll have when you achieve the financial resolutions you’ve set will be nothing short of immense!


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