Financial Resolutions

5 Financial Resolutions you should stick to

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Like New Year resolutions, we all tend to set financial resolutions. But, the problem arrives when we have to stick to them. Now don’t be depressed if this sounds like your story. All of us go through this in our lives. So buckle up and be optimistic. Here we will talk about 5 essential financial resolutions that you should stick to for a financially secure future.

Next time you are working on your financial resolution list, do consider these pointers. Hopefully, they will help you achieve your financial goals.

Reasonable budgeting

When we think about money, we always think about how to scale up our capital. But if you put some effort into your budgeting, you will actually save more than you can imagine.

A reasonable budget will showcase how you are treating your money and whether your budget supports your long and short term goals. When we talk about a financial budget, we are actually looking at our expenses. Because when you understand spending, then only you can start to save. Whatever the cause-vacation or paying credit card bills. A proper budget will guide you towards fulfilling them.

Now, skipping a coffee order might not sound like something big. But calculate the amount you save on a monthly basis, and it is actually a gain. Again, eating out on a regular basis and unplanned shopping may nurture your taste buds and ego, but if you think rationally, they are not uplifting your finances and health.

What is the best way out? Keep track of your monthly spending. Then figure out the unwanted ones and say goodbye to them.

Work on your credit score

Make it a mission to improve your credit score. Now, you may think, “I don’t deal with credit. Why should I think about my credit score?” A credit score is not only for the present but also serves your future loan or credit requirements.

So, if you don’t have a credit score and are looking to build one, you can apply for a secured credit card, where the card is issued against a fixed deposit account, and you don’t have to have a credit score. A Kotak #DreamDifferent Credit Card is a good option. Kotak811 offers these credit card with their zero balance account and should be the perfect choice for someone looking to build their credit score from the scratch.

If you have a credit score and it’s not looking that charming, plan how you will raise it to a better number. Never miss your credit card bills’ due dates or loan EMI dates. Don’t indulge in too much credit at the same time. Clear off active cards before applying for a new one.

Start small but effective

Rome was not built in a day, and you don’t have to achieve your financial goals in 3 months’ time. Spread your goals so they become achievable. It should be an exciting journey, not something that scares you away.

If you are planning for a certain kind of retirement lifestyle, figure out the kind of money you will require to support such a lifestyle, and start saving accordingly. Do remember to consider the rate of inflation when thinking about building your retirement fund.

Again, if you want to go on your dream vacation, say next year, research whatever you can about the place and what kind of balance you require. Then look at how much you can save. Even if you can’t reach the required amount, try and save as much as you can. For the rest, you may look for a travel loan. This will ensure you don’t incur too much debt.

Invest as much as you can

The way things are panning out, more is actually less. So, don’t leave cash lying around. If you are new to savings and investments, start with the basics.

First thing first, open a savings account, and don’t worry, you don’t have to visit a bank for that. What you can do instead is open a zero balance savings account online. The best part of such an account is that there are no maintenance fees; yes, that’s right, and you earn decent interest per annum on the money saved in the account.

The next best thing for you is to open a recurring deposit account; this will inculcate the habit of saving. A recurring deposit account requires regular deposits for a fixed tenure. The interest earned is good and free of market fluctuations.

If you can handle risk, investing in mutual funds is another option. Don’t forget to build your retirement fund and medical policy. All of this might sound like a lengthy list, but it is important. So prioritize, and start saving today. It is always better to be your own support.

Educate yourself

Not all your plans have to be about doing; gathering the right information is equally important and valuable. Depending on your age and requirements, be informed. As a student, you should have some knowledge about student loans; as a new employee, you should be aware of insurance plans and term plans. When you are aware of financial instruments and ways, your planning will be more effective and balanced.

Takeaway

Hope these plans will guide you towards a better financial future, and those who are yet to plan their resolutions, think about the ones we mentioned.

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