We are already cruising through the first quarter of the year, however, there’s still ample room to get your financial habits in place. You may think that you have successfully managed your finances in the previous year, and you are planning to follow the same financial schedule this year too. Nothing wrong with that, however, keeping yourself updated and adapting with the changing times will always help you in the long run.
Here are some of the top financial resolutions to you can aim for in 2021.
Plan a budget: You can call it a reminder that runs in loop. It’s important that you start planning your monthly or yearly expenses right from the beginning of the year. Plan your vacations early so that you have a clear understanding of how much money you will be spending on your trip. Of course, there will be changes in the set budget, but still you will be able to gauge how much you will be spending to an extent. For example, your existing personal loan and credit card payments won’t change. However, the onus is on you to make sure that you don’t overspend. You can also review your last year’s expenses and check if you cut short on any one of the areas.
Invest more: If you only have a fixed deposit account, it’s time to put your money in more investment vehicles. Investment modes like stocks, bonds, and property will give you more returns in the long run. So, when you retire, you can lead a financially independent life without worrying too much about your money.
Create a retirement plan: Who doesn’t want to lead a tension-free life after retiring? You can have that life if you start planning a bit early. Again, investment will play a key role in in expanding your wealth. Other than that, your FD and savings account will also help you manage your finances when you retire. What you can do is start putting more money in your savings account. You can also opt for Government-backed investment plans like Public Provident Fund (PPF) and other retirement savings schemes.
Start clearing your debts: If you have too many loans running simultaneously, it’s time to close a few of them. Although it’s good to be in debt so that your credit score doesn’t take a hit, but that doesn’t mean you will rack up debts that may soon become unmanageable. To get rid of the headache, try clearing your outstanding dues on time. Balance your debt to income ratio in such a way so that you’re able to make prepayments without any hassle.
Sign up for health and life insurance plans: No one can predict what life has in store for us. If something happens to you, make sure that your family doesn’t have to go through the financial ordeal. The best way to secure your family’s future is by signing up for an insurance policy. This will help your family to shy away from getting entwined in a financial cesspool even when you’re not there.
Boost your emergency fund: Start putting more money in your emergency fund. So, if at any point in time, life throws a challenge, you will be able to embrace it gracefully. You can put 3% to 5% of your income to build the fund. You can also invest in a liquid asset like gold, which can be converted into cash.
Have a set financial goal: Having a specific goal always helps. You will at least an idea what you want to achieve by the end of the year. It’s true that emergency situations can derail everything, but still with pre-panning you will still be able to fight off any sort of adverse financial conditions. However, it’s your responsibility to work harder in order to reach that goal.
Consult a financial planner: You can take the help of a financial planner to manage your finances in a better way. They will guide you through everything related to financial planning. That way, you will have a better idea on which investment vehicle is ideal for you and how you can increase your wealth over the course of time.
These are just mere ideas, which you can turn into reality with proper planning. So, start saving and investing more so that you can embrace the coming year with aplomb.