As we usher in the New Year, almost all of us plan our vacations, parties and visits to our family and friends meticulously and with a lot of effort; not to forget our resolutions, as an afterthought.
One must try to make the most practical resolutions and not obsess over impractical ones. Make resolutions now, rather than later. Now is the perfect time to begin and sort your financial planning for the coming year, while ensuring that the celebratory mood of this holiday season is not dampened in any way.
More often than not, we promise ourselves impractical resolutions which only set us up for failure in the long run. However, there are better chances of succeeding by simply keeping in mind a few factors; namely, foresight into what you aspire to in terms of financial health in 2016 and the discipline to create it.
Here are a few resolutions you must make to ensure not just a stable financial year in 2016, but also a secure and satisfactory one:
Prioritize your Debts
First, list out all your financial obligations. These could be personal loans, debts on credit card bills, two-wheeler or car loans, home loans or even loans from private financiers. Focus on repaying most of them at the earliest and work on a strategy to manage them. First, pay off the loans that have very high rates of interest on them. Use any bonus that you receive or spare cash at hand to reduce these amounts. Gradually move on to ones with lower rates of interest as you won’t be spending too much on just the interest on these. This will largely improve your financial health and create the first level of stability.
Chalk out a Monthly Budget
One of the most important things to do to change the course of your finances in 2016 is to stop confusing your needs with your wants. Chalking out a monthly budget for yourself will help you identify what you need versus what you desire, thereby helping you delay certain purchases that can actually be postponed to a later date.
It is only natural and extremely common for people to immediately spend money on expensive things when they have the money in their hands. One must remember that before giving into such indulgences or “lifestyle inflation”, one must compulsorily make a budget for oneself and stick to it. Ensure that savings are an essential part of this monthly budget.
Spike up your Savings
Most of us are not in the habit of saving regularly and at such times, if life throws an unfortunate situation at us, we end up facing a huge liquidity crunch. A good start would be to choose a bank account which comes with an auto-savings facility. This will ensure regular savings. It is highly recommended that you maintain a savings of at least six months of your usual living expenses which will act as an emergency fund in times of need.
These are some basic financial resolutions to keep in mind, apart from the obvious ones like promising yourself that you will pay your credit card bills on time, getting yourself that life and health insurance that you have been putting off forever and ensuring that you take a good home loan and build yourself your dream home (an asset that will yield manifold returns in the years to come).
One cannot deny the excitement that actually goes into making good resolutions for the coming year, but we often forget to actually stick to them. They just remain resolutions. Make it a point to stick to your plans. Don’t put off researching the best investment options and making those financial decisions.
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