In the first couple of weeks of the year, most people commit with determination to all sorts of goals, from staying healthy to learning new skills, staying fit to better financial planning. The New Year is a great time to reset life for a new start.
While the days leading up to New Year’s Eve are often spent reflecting on the year gone by, the following days are the perfect time to create a solid plan and make some sensible decisions that will impact one’s long-term physical, emotional and financial well-being.
In the first couple of weeks of the year, most people commit with determination to all sorts of goals, from staying healthy to learning new skills, staying fit to better financial planning. The New Year is a great time to reset life for a new start. While some of these resolutions come true, many become part of the to-do list next year.
Depending on your resolutions, you can start by consulting a dietician, if you wish to opt for a healthy lifestyle. Similarly, for a better financial future, you can start by reviewing your last year financial scorecard to get finances in order for the upcoming year. Money saved is money earned and it plays a great role to ensure peace of mind in one’s life. For a happier and more secure tomorrow, make your New Year resolutions well in time and execute the plans. Most importantly, don’t neglect to make a good financial plan for yourself.
Here are some New Year goals you can set to enhance the quality of your life:
1. Make a list of your personal goals
While making New Year resolutions, review your assets and liabilities and define personal goals. Anjali Malhotra, Chief Customer, Marketing, Digital and IT Officer, Aviva Life Insurance, says, “Over time, it is easy to accumulate lots of savings accounts and credit cards, but to take advantage of these savings, you should think about the goals and needs.” She adds, “Take stock of exactly where you would spend and save. For instance, saving for a new home or car or spending on child’s education or a dream holiday.”
2. Be mindful of your spending
One thing which everyone needs to do is establish a plan for managing finances. Hence, by preparing a budget for the coming year, you will be able to understand where the money is being spent and where to stick to savings. Budgeting is the most important thing to be financially successful and being frugal in spending will help free up money for more important goals.
3. Save and invest
Investing helps in growing the saved money at a quicker rate. However, the first step before investing should be saving. There are lots of ways to start investing. Malhotra of Aviva Life Insurance says, “Seek a regulated financial adviser or open a separate savings account, invest in the stock market or invest in an insurance plan that returns double the premium on maturity.”
4. Create an extra income
Try to find a way to start making more money or alternatively, invent a plan to cut down on current costs instead of spending all of it. The extra income generated can be used to pay off any debts, shorten the length of the loan, save a little more towards retirement or will simply boost monthly finances.
5. Secure your family’s future with the right products
Life insurance is one of the first fundamental blocks of good financial planning. Assess the amount that your family would require and be prepared for uncertain events in life with the right insurance products. Term insurance plans are affordable yet provide comprehensive security to the insured and his family. One should also consider investing in child insurance plans to fulfil the child’s dream and for their secured future.
6. Be debt- free
Getting out of debt is another key step to taking control of finances. The key is to make a list of all debts, increase in EMIs, pay bills on time, clear all outstanding debts to have more freedom to do the things that one wants to. Being debt-free also gives greater job flexibility and more peace of mind.
7. Build an emergency fund
An essential component of a solid plan is an emergency fund to cover the financial shortfall on unexpected rainy days. Start with a smaller emergency fund depending upon the current income, number of earning members family and the assets. Consider setting up automatic transfers from paychecks to a savings account but the emergency funds should be large enough to fuel monthly expenses for at least six months and should be liquid.
8. Start saving for your retirement
Saving for retirement is one of the most important aspects of a financial journey, but most seem to push it because it is a goal far away. Try to invest in retirement plans like the Public Provided Fund (PPF), annuity plans, National Pension Scheme (NPS) or insurance policies that guarantee a return on the maturity of the policy. It helps in growing the investments by earning interest on interest. With the increase in salary, contribute more to retirement plans so that you could retire rich.