Financial Resolutions 2019

The excitement of the new year also comes with the guilt that the things we promised ourselves at the start of the year could not be accomplished. This new year will be no different, and as the year is about to dawn upon us, all of us would be again ready to make our new year resolutions which we promise ourselves to implement. However, it loses the momentum by the end of the year--some are achieved, some are forgotten. But when we make new year resolutions, have we ever thought of including our finances in it? May be, may not be. Very few people tend to include finances in their new year resolutions. However, in the coming new year, we have Akhil who has decided to consider finances as his priority and make financial resolutions for the year 2019, apart from other resolutions, and stick to them till the end. Let's walk through Akhil’s new year resolutions which he promised to stick.




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



I would close all the accounts not in use
When I looked at the list of the accounts that I had opened and remained active in my name, I wondered when and for what purpose I had opened these many bank and credit card accounts that I don’t even use now. So I decided in the coming new year I won’t open any such unnecessary accounts and to close the unused accounts as these were an unnecessary cost to me.



I would have emergency fund in place
This year I met with an accident and was advised bed rest for almost two months. I had even exhausted the credit card limit, not to mention spending my little savings. The first month went fine, but in the next month, I had to borrow from friends and relatives, but I was still not able to fulfil my basic necessities. So I took a personal loan for the same. This again led to increase in my debt levels. So, with this experience, in this new year I have decided to have in hand at least three months of my expenses as my emergency fund. Out of this, one-and-half month of expenses would be in liquid mutual funds, one month expenses would be in my savings bank account and 15 days' expenses would be in cash at my home so that even if ATMs are not working or I am not able to access the ATM, I can still survive for at least 15 days till I can access the ATMs again.



I would set financial goals
In the year 2018, I started investing in mutual funds and other financial instruments and started reading and watching financial experts waxing eloquent on the TV channels. 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 these investments to my financial goals so that my investments are properly channelised. While setting goals, I would also segregate them between my 'needs', which I cannot avoid at any cost, like my child Prithvi’s education, and 'wants', which I can avoid, like my plan to upgrade my car from hatchback to sedan.



I would plan for my retirement
I am 35-year-old now and would retire in the next 25 years. Therefore, I need to accumulate sufficient amount of money so that even if I am not earning after retirement, I can spend my retirement without worrying about money. Since I still have 25 years to go, I would accumulate via SIP in mutual funds so that I remain disciplined and committed towards my investments. I would also make sure that I get my risk profile assessed before I make any further investment decisions in the new year.



I would control my spending through credit card
I wish to share an interesting conversation between a journalist and the devil. The journalist asks the devil, “What is the most evil thing that you have ever done?”. The devil replies “I spread negativity among people”. The journalist again asks “No! The cruel thing that you have done”. The devil replies “I kill people”. The unsatisfied journalist again asks the question to the devil that “Which is the most dangerous things that you have ever done”. The devil then replies “Oh! I invented credit card”.

 I may have splurged a lot with the help of credit card as it gives immediate access to money, or you can say, a post-paid facility to splurge. So this new year, I would refrain from using the credit cards. Credit cards are not bad though, if you use them smartly and use them only at the time of emergency and not for splurging.



I would do proper tax planning
This year I would make sure that I will not run around at the last moment in March for planning my taxes. In fact, I will plan my taxes from the beginning of the year so that I can save myself from falling prey to any such products which are not efficient enough to give me good returns in the future, apart from the tax deduction benefits. Rather, I would invest in ELSS via SIP route so that I have no burden on my wallet all at once.



I would buy life insurance for what it is
In the year 2019 and ahead, I would make sure that I buy life insurance for what it is. That is, to insure my life against any unforeseen eventuality and not as an investment. So, I would rather stick to my term insurance plan and take additional sum insured when required.



I would include my family while making financial decisions
As I understand, whatever we do, we do it for our family. So, it is important to involve them also into our financial matters. I have made a resolution for the coming new year to involve my wife and son in our financial matters and discuss with them all the matters related to our finances. Also, I would share with them the numbers of important people whom they can contact in case of my absence or emergency.



The last resolution that I would like to list is that I will not forget the above resolutions made by me and stick to them till the year end.

So, we can learn from Akhil and also include our finances in our new year resolutions and make sure that we follow them through, which would indeed enrich our financial lives. 

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