Financial resolutions for 2021

New Year has already begun and I’m sure you all must have already started making resolutions to attain this year. Nevertheless, we all try to implement our resolutions at the beginning of the year but somehow lose momentum by the time, the year ends and then, finally, the time comes to make another set of resolutions. New Year comes and goes but when it comes to resolutions, some are followed while others are scrapped. However, many a time, while making New Year resolutions, we don’t include our finances in it. Though there are people who tend to include finances in their New Year resolutions, yet the number is less. However, this New Year, we have Akhil, who has decided to consider his finances and make financial resolutions for the year 2021, apart from other resolutions and stick to it till the end of the year. Akhil, who is working with a leading MNC for several years now, will take you over to his decided financial resolutions. Over to you, Akhil!  

I would create a proper budget 

Many a time, I don’t understand where my money goes at the end of the year! I never kept any track as to from where I am receiving money or spending. So, this December, I sat down and looked at my bank & credit card statements and realised that I was not actually spending but was splurging money out. Hence, I made this as my first New Year resolution that I would create a budget and also track my incomes & expenses. This will help me in prioritising expenses and reduce unnecessary splurging and invest that amount in mutual funds to create wealth. 

I could have created an emergency fund in place 

The year 2020 can be termed as the year of the pandemic, which has taught me a lot of lessons. I lost my job and all my savings were exhausted including my credit card limit. Though the first few months went fine but in the next month, I had to borrow from friends & relatives but still was not able to fulfill my basic necessities. Therefore, there was no other option except to take a personal loan. This again elevated my debt levels. Hence, this new year, I have decided to have in hand at least six to nine months of my expenses as an emergency fund in hand, of which, four & half months of expenses would be in liquid mutual funds, one-month expenses would be in my savings bank account and half a month’s expenses would be in cash at my home so that even if ATMs aren’t working or I am not able to access the ATM, still I can survive for at least 15 days till the ATMs starts operating again. 

I would buy life insurance for what it is 

In the year 2021 and ahead, I would make sure that I would buy life insurance for what it is meant for, that is to ensure my life against any unforeseen situation and not as an investment. Therefore, I would rather stick to a term insurance plan and take an additional sum insured when required. 

I would set financial goals 

In the year 2020, I started investing in mutual funds and other financial instruments as well as spared time for reading and watching experts. It came to my notice that I was travelling without any destination, which was leading me nowhere. So, this New Year, I would set financial goals and whenever I invest in mutual funds or any other investment for that matter, I would link those to my financial goals in order to channelise my investments properly. While setting goals as well, I would segregate them between the needs that couldn’t be avoided at any cost like my child Prithvi’s education and wants, which I can avoid like upgrading my car from Hatchback to Sedan. 

It was great to know that Akhil included his finances in his New Year resolution. It’s indeed great learning for all of us. Hence, we all should do the same i.e. keep track and follow this regime throughout the year, which would ultimately help us in nourishing our overall financial life.