The New Year is an auspicious time to begin anew. Set aside the setbacks of 2016 and look ahead. Demonetization has added a new dimension and reset financial goal posts for almost everyone. The lack of liquidity in the market has made people worried about the future. We discuss 10 ways how you can manage your finances and allow your money to grow. Here are the Resolutions.
- Have clear financial goals
Figure out your financial goals. Be clear and realistic about your goals. Create an actionable plan that will help you reach your goals. Don’t have vague intentions – don’t say that “this year, I will save more” or “this year I will pay all my debts.” Note down precisely how much is your savings goal or how much of your debts you will repay this year.
- Use technology to manage personal finance
Knowledge is power. Track how much money you spend every year on buying books and gadgets and movie tickets. We all know the range of technology available today can save precious time and money. Use various personal financial apps to compare prices on products for best deals, pay bills online, book taxis, and pay credit card bills. Use software available to note every expense during the year. Looking through it at the end of the year can be insightful. Take advantage of financial apps that can help you invest and grow your money.
- Cut down your debt
While we would advise you to keep debts to a minimum throughout the year; if you do have any debts, make a list of them. Debts with higher interest rates like credit card bills should be paid off immediately. Less debts you hold, the lesser financial obligations you would have. Less debts also means you would be better prepared in case of a financial crisis.
- Encash your hobbies
Most often, we are not working in a field that we are truly passionate about. Find a way to turn your passions and hobbies into profit. In 2017, take a resolution to make your passion projects take off. Technology is making it easier for you to start your own business while continuing your current income. Let your passion bloom.
- Pay your savings account
This is crucial. Saving your money in a high yield savings account will help you achieve your financial goals set out in Step 1. Make a resolution to save at least 10% of your monthly income and act on it. Your savings account is your cushion for meeting any requirements in case of a financial emergency.
- Diversify your investments
Investing your money in order to allow it to grow is a great financial strategy. But, if your investments are not diversified, then you can be setting yourself up for a financial disaster, especially since you will have a new president in 2017. So in order to make sure that your investments aren’t susceptible to loss, review them with your financial adviser and diversify as much as possible.
- Protecting your assets
We can all agree that we work hard for our money. Instead of leaving your financial security to chance, you must make sure that you are properly protecting your finances. You do this by looking into the right insurance based on your needs. Whether it is rental insurance, homeowners insurance, life insurance, short term/long term disability insurance, or travel insurance, you need to make sure that your assets are protected in the event of an unforeseen emergency.
- Emergency and pension fund
Build an emergency fund – it could be worth your salary of about 4 to 6 months. In case of any unforeseen emergency, this fund will be crucial in dealing with it. Saving for your retirement is crucial in any financial planning. Look to invest in a public provident fund, annuity or pension schemes – ensure your financial stability when you are no longer working. A financially secure life extends to your twilight years as well.
- Give money to value money
One of the most effective ways to learn the value of money is to give it. Pass on the blessings of your life to others who are less fortunate. Show your gratitude this year by donating your time to teach children in the slums or helping out in old age care homes or pet shelters and by donating money to a good cause. It can also just be the simple gesture of paying for a customer in line. There is magic in committing such small acts of kindness.
- Don’t be scared of financial books
In 2017, read a finance or business book each month. Or how about a business or finance podcast. Even regularly listening to financial news can help you. Understanding the nature of money, investments and how financial markets behave are essential to help you manage and grow your money.
Spell out new goals for yourself. Plan accordingly.