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2021 marks the inception of a new decade. We are marking to end Covid-19 as vaccine distribution is scheduled for this year which brings hope and new possibilities for everyone.
With the new year comes new resolutions. But do we follow them? The year 2020 has taught us that it is important to be financially prepared.
The initial days of the new year are always a good time to plan for the rest of the year and also to analyze the previous year. In the starting few days of the new year, we realize the mistakes we made in the past months and we try to modify or correct them in the following year by proper implementations and plannings. Today the world is more advanced and ahead than it used to be a decade ago, and therefore to attain a stable financial status it is a must to keep track of spending habits.
Having Financial resolutions and making sure that you fulfill them can lead to the best way to improve your finances. Not just finances it will change the other domains of your life, you will be able to enjoy holidays and take your business to new heights and achieve excellence. Achieving all these requires financial authority and strategy and this is where Financial Resolutions come into the picture.
1. Planning and Fidelity to Budget Spendings
This resolution is the most important as compared to others because if this is successfully implemented others will automatically fall into the right place. To implement this, you must prepare a monthly budget before the start of the month and then match it with the existing budget at the end. In this way, you will realize the overspending and also get a rough idea to minimize unnecessary expenses. You might face problems in the initial days but with time you will be able to execute it readily and over budgeting will reduce every month.
To avoid excessive buying of unwanted things, prepare a list of all things that you need and this avoids the extra spendings on the non-required materials that we always end up buying. Try to minimize the use of credit cards until it is an emergency. It will save you from debts that you do not require to carry, and if you pay with debit cards or net banking instead you will spend within limits.
2. Get Health and Term-Life Insurance
Covid Vaccination has started, but it is still uncertain when will everyone get access to it, and till then we have to be very cautious and alert. If anyone in your family or yourself suffered from the disease the costs of hospitalization will be very high and will affect your savings. Several people were not well off and died in this pandemic and were not having health insurance, their families also spent all their savings on the treatment and are now left with nothing.
To meet all these expenses, it is a must that you have health insurance and life cover insurance, which accounts for at least 10 times your annual income. You can have this health cover insurance for every member of your family and a life-cover for all the earning members in the family.
Go for insurance that has high sum rates because we all know medical costs are rising daily, if you are not sure to afford it, go for top-ups or super top-ups plans. To ensure the safety of your family, you must take these resolutions.
3. Be prepared with Emergency Fund
As the pandemic hit us, most of the businesses shut, people lost their jobs or had a pay cut. Most of the self-employed people faced problems with the cash inputs. And all these made us realize the importance of having an emergency fund. Every individual must at least try to have 6 months of emergency funds which will include all your expenses.
This emergency fund will be very useful at the time of any medical emergency or your job being lost. Wherever you start saving this emergency fund, be it any bank or liquid deposit, but it must be extracted easily whenever required. If you have an emergency fund with you already that’s great, but if you don’t have it you cannot create it all of a sudden, you can start by investing in systematic investment plans in some of the liquid deposits, which can be transferred to the bank whenever required.
4. Pay your debts on Time
In the world of expenses and high spendings, Loans have been an integral part of almost every man to meet his/her expenses. According to a survey, 27% of the households have at least one loan, be it in rural or urban areas. And most of them are in serious debt, which costs around 20% of the total GDP.
Loans help us by funding for our financial requirements, but paying off its debt on time is important. Skipping EMI’s causes a huge effect on the credit score and also creates debt for you by increasing the interest rates. If you don’t take it seriously, you can be in a debt trap coming out of which can be tedious. So consider paying debts on time this year, so that you do not create excessive debts for yourself.
5. Create a resolution for your resolution
What is the point in making resolutions when you do not follow them? So in the beginning create a resolution for your resolution and try to stick to the above-mentioned points. If you cheat your diet resolution or exercise resolutions, they will not impact as much as cheating a financial resolution will do. Being financially stable is the most important life factor, and if you achieve financial independence, then you will be able to do the rest happily.
A new year and a new decade have started, and you have the opportunity to secure your financial status and start a decade. Do not blame anyone for whatever is happening to you, instead, try sticking to these points towards your success and implement your resolutions in the best possible ways. Financepeer can help you achieve your financial goals easily. It is the best time to have the right stock of your financial hits.
We hope these points will help you to make your financial standings and make your planning easy. Have some financial specialists reach you out on your goals.