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As 2020 draws to a close, it is time to start planning for 2021. While you are at it, do not forget to give your New Year’s Financial Resolutions a thoughtl.
We give you some ideas for the New Year's financial resolution that ensure that you make the best of your savings and investment in the coming year.
1. Set New Year financial goals
List down the financial goals you wish to achieve in New Year 2021 for which you want to save. It can be a savings amount, an investment goal or a financial milestone. A written list will give you a clearer perspective, and you can plan for them accordingly. Review the list, keeping in mind your current financial condition. Allocating money for each of these goals can then be planned more efficiently. These New Year financial resolutions can be short term and long term. Lastly, choose financial instruments that can help you reach these financial goals
2. Prepare a realistic budget
In your enthusiasm, you may become overly optimistic and set goals which are beyond your capability. New Year financial resolutions fail, mostly because they are unrealistic. Hence, the first step towards setting New Year financial goals is to make a budgetary plan that is within your capacity. Do not be so restrictive in your budget that you cannot adhere to it. Estimate your basic monthly expenditure, the extra expenses and any other responsibility that you may have. Reflect upon the non-essential expenses that can be cut down. Accordingly, set aside a target amount for your savings and investments. Stick to this budget firmly. A sound budget is one which is practical and can be followed. This can help in meeting your goals and your financial resolutions.
3. Do not be lured by offers
Discounts, Buy One Get One, cashback and many more offers catch our attention and pique our interest. We fall prey to these festive or non-festive offers, thinking that we are striking a good deal. However, we end up splurging on these offers. This is an excellent New Year financial resolution you can make to save more.
Purchase according to your need and the financial plan you have drawn up. This New Year 2021, resolve to control your spending on these seemingly attractive offers and you can make a significant positive difference in your financial management.
4. Invest in an Emergency Fund
This New Year, you can resolve to make an Emergency Fund to meet any exigency, be it related to health, family, education or other financial matters.
There is no specific procedure for setting up such a fund. You can make a separate savings account and set aside a part of your income every month. In fact, as soon as you draw your salary, make it a point to transfer a part of it to the emergency fund. This practice must be followed in a disciplined manner. Do not dip into this fund unless the requirement is urgent. This fund can make all the difference when you are in a dire situation.
5. Start investing smartly
An important financial resolution is to invest in financial instruments and other investment for wealth generation. However, you must ensure that you are not lured into purchasing every plan that promises attractive returns. Keeping into consideration your goals and financial capacity, invest in plans most suited to you. The first investment should be towards your and family’s health. Do not be influenced by the trend of the market. If needed, consult with a financial expert before investing.
Practical and rewarding, these New Year financial tips are sure to make a firm foundation for your financial planning.
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