Financial Resolutions For The New Year

New Year resolutions don't have to be just about diet and exercise. Sometimes the area in your life that really needs attention is your finances, and as we begin 2023, this is an opportunity to reset and reassess. The New Year is a great time to rejuvenate your finances. Here are some New Year resolutions to help improve your financial health.

Track your expenses

"A penny saved is a penny earned" is a very wise quote by Benjamin Franklin. We all earn a decent income by the end of the month which would be categorized as salaried income or business income. But most of us do not know where and how our money is spent. Tracking your expenses can be one of the important resolutions you can set this new year. The best way is to use an expense management app that automatically recognizes all your online banking, debit and credit card spending. Moreover, these costs are automatically classified into various categories such as shopping, dining, transportation, etc. You can also view a pie chart displayed to analyze the areas you overspend which can help you curb unwanted expenses.

Build your emergency fund

If an emergency strikes, you'll be in trouble without an emergency fund. An emergency fund can be a lifesaver when unexpected challenges come to your life, such as unemployment, accidents, or pandemics. If you don't have an emergency fund at the beginning of the new year, it's time to plan one. First, calculate your monthly expenses to determine how much you need as an emergency fund. This should include not only rent and mortgage but also utilities and basic expenses. Many financial experts agree that you need at least three to six months of spending, but it doesn't hurt to overestimate how much cash you need in an emergency.

Review your financial goals

Review your financial goals based on future spending and investments. When was the last time you checked them? If you haven't had time lately, it might be time for a review. We generally suggest our clients to review their financial goals every year. Just to be sure that your investments are aligned with your future goals. Also, it is important to have clear financial goals. For example, you can be specific like "I want to reduce my car loan and save Rs 3,00,000 by the end of the year."

Make a Plan to Pay Off Debts

It is advisable to have a plan to reduce your debts, i.e. car loans, credit card outstanding, education loans, home loans, etc. Easy access to credit has significantly taken away financial discipline.

Create a Financial Plan

Making a financial plan is more than just choosing a few stocks to invest in. You have to consider your current financial situation and your future financial goals and draw a roadmap to achieve them. It is also important to draw a timeline and understand your risk appetite before you determine your asset allocation. This may require a lot of research or consulting with your financial advisor to help you create your customized financial plan.

Secure your family with health and life insurance

Insurance is one of the means to protect the future of not only your child but also your family. Very similar to building fire alarms. It may not be used routinely, but detecting certain levels of smoke that could be a sign of a fire can save lives. There are many types of insurance plans, but the most important is life insurance. You need to understand life's uncertainties and make plans to ensure the financial security of your loved ones. Also having adequate Health Insurance is equally important as it can pay for your medical emergencies, hospitalization, contraction of any illness and treatment in future.

About the Author

Manalee Verneker is the founder of Financial Wisdom, a privately established financial services firm based in Goa, India. Financial Wisdom was founded by her in 2021, after just less than a decade of experience in the field of personal finance. She is a Certified Financial Planner (CFPCM) from the Financial Planning Standard Board India and a Chartered Wealth Manager (CWM) from the American Academy of Financial Management. She is passionate about personal finance management, and financial literacy and is a strong advocate for financial advice that focuses solely on the individuals.

She can be contacted on:

Phone: 8378080888

Email: manalee@financialwisdom.co.in

Website: www.financialwisdom.co.in

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