10 New Year Financial Resolutions ToLive By

We are fast approaching closure of one more year and this is not just an year but also a closure of decade. Many of us are gearing up for taking up new year resolutions once again just like we have been doing every year. Whether we have been able to live up to them or not is a different story, but we have been very regular and prompt in deciding resolutions for ourselves year after year.

This year I will encourage you to focus on different type of resolutions to take and live by. Yes, we are going to talk about some of the best financial practises in the field of Personal Finances. Making these promises to oneself will make a big difference to your financial well-being. 

I promise, I will………

Ensurefinancial protection of my family (after I am gone) by buying Life Insurance Term Plan for a Sum Assured adequate to help them maintain same quality of life as I have been providing to them.

Subscribe to a personal Health Insurance Policy Plan covering myself and my family (apart from the one provided by employer if any) to take care of uncertain hospital expenses which are rising at rate, double the rate of insurance on normal products.

Create a Financial Folder/File where I shall write down details all my existing investments (called as Assets) and the details of all the money I owe to others (called as liabilities), if any. These details well protected by password would be made aware to my family so that in case of any emergency they can access the information.

Restrict all my loan EMI to not more than 40% of my monthly take home salary specially for Home loans and Car loans. I will strictly avoid personal loans and credit card loans as they are very expensive and eat into my savings.

Monitor all my expenses by recording my every-day expenses in a designated workbook or by recording in popularly available financial apps. This will make me aware of my expense basket and help me avoid unnecessary expenses which act like a leaking hole in my saving corpus.

Take all necessary steps to improve my knowledge in the field of Personal Finance. This can be achieved by dedicating few hours in a week towards reading articles and blogs in financial magazines and newspaper. This will be supplemented by financial literacy programmes on TV and You Tube Channels. This will help in taking informed financial decisions.

Strive for a minimum monthly savings (and investment there-off) of at least 25-30% of my monthly income so that I can use these funds to meet my big-ticket financial goals in future. I understand that in failing to do so, I am risking my ability to provide a safety net for myself and family goals for future.

Diversify my investments across different investment instruments (also called as Asset classes} mainly – market linked instruments like stocks and mutual funds and fixed interest instruments like FD, EPF, PPF, Bonds. I will also be conscious of my investments in real estate and gold. I will thus benefit from healthy balance among various asset classes. 

Improveawareness of my current financial situations by understanding my current incomes, expenses, assets and liabilities. I will improve my visibility of future by writing down all big-ticket expenses and financial goals (as best as I can imagine) in specific monetary value and with timelines. This will be guiding force for all financial actions.

Finally take services of guide or mentor in case I am unable to live up to these financial resolutions. Just like I take advice from a doctor, lawyer, mechanic, astrologer etc to fix other matters, I will consult a Financial Planner for guiding me to my financial wellbeing.