“Hope is a waking dream.” — Aristotle
It is that time of the year, when we set the clock to zero, the world turns a new page and everyone resolves to start afresh. Human spirit lives on hope for a better future, despite all odds. New Year is a clean slate given to us every year, to write new goals, chalk a plan and sprint with renewed energy. Did you write resolutions for 2023? Health, Family, Relationships, Money? We did too, albeit the order may be different.Let’s discuss the financial resolutions for 2023:
Money Goals: Many of us resolve to run a marathon or lose weight in the new year. Why not set money goals too? As simple as it may sound, measurable, time bound goals make it easy to follow through and persist. You may not have a specific goal in mind and investing for the future may be the idea, but it helps to quantify every goal, however small and build a pot of money for it exclusively. A clear goal means a clear vision and action plan.
Spend Smart: In the age of mega sale days and non-stop social activities, one may feel left out if not living a certain lifestyle. But remember, a penny saved is a penny earned. Making a budget, allocating a specific amount for every spend will ensure you don’t make spur of themoment purchase decisions. Utilise the offers, points and discounts offered by sellers and card cos.
Say No to Credit Card Debt: Credit card debt is one of the most expensive loan products, you may end up paying 30-35% interest if not managed well. Stay away from debt which is not helping you to build an asset. Stay up-to-date and automate with payments, delayed payments can spoil your credit rating.
Contingency Fund: In a shaky economy, it is wise to keep six to twelve months of expenses in a liquid fund or deposit. This money will help you tide over any financial instability. Ensure you add EMIs, regular commitments as well in this pool.
Buy Insurance: Life is uncertain as Covid demonstrated. Black Swan events do happen and can turn life upside down. Buy a simple life cover for an amount that can cover your income for your family in case of eventuality. Health cover is no more a luxury but a necessity with rising health care cost and inflation.
Know Thyself: Enhance your investing skills through books, websites and news updates. Assess your investing style, beliefs and risk appetite. Emotions, past experiences or family members often colour our decisions but may not be relevant for today’s times. Real estate, govt schemes or fixed deposits are no longer enough to earn good returns. Equity investments help you create wealth in the long term, though volatile in the short term.
Last, but not the least, ensure that you have added nominees, created joint accounts and kept your family informed about all your investments and kept all records in a shared file.
Wish you a wonderful and prosperous 2023.
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