With this fresh start, let’s resolve to make our financial resolutions stick in 2019, writes Anjali Malhotra
The New Year has just begun. And it has brought the gift of a fresh start with it. Trying to make the most of this opportunity, individuals often resolve to lead a healthier lifestyle, to adopt financial discipline, and invest wisely to stay financially healthy. But, while we make multiple resolutions every year, most of us are unable to see them through.
What we need to appreciate is that planning our personal finance is for our own well-being and betterment. We can simply start by making solid financial resolutions that can help get us closer to our money goals, whether it is increasing retirement savings or setting enough money aside for a down payment on a house, or keeping the future financially secured. Here are some New Year resolutions proposed by Anjali Malhotra, Chief Customer, Marketing and Digital Officer; Aviva Life Insurance.
Review finances, Define personal goals
Take stock of your assets and liabilities; review your finances. Understand how money works. For instance, controlled credit card spending means lesser debt; less spending on unnecessary purchases (like impulsive buying) means more savings. Think about what you would like to save for (children’s education, new home, car, a dream holiday) and consider how long you would need to save up to achieve that particular goal.
Now that 2019 has finally shown its pretty face to us, it’s the perfect time to prepare a budget for the year. However, as often happens, while you manage to successfully plan a budget, you fail to stick to it. Staying within the budget will not only ensure that your expenses are planned but also ensure that you achieve your financial goals. Temptations lead to debts and problems in the cash flow. Keep your bank passbook updated. Find out your credit score to determine your financial status. Try improving upon it. Update your budget regularly.
Involve family IN YOUR financial decisions
Teach your children about saving money and cutting down on unnecessary expenditure. Educating them about these basic financial concepts will provide clarity on the family’s financial goals. Plan household budgets collectively so that everyone gets the opportunity to participate in saving and spending, and the responsibility is equally divided.
Start saving for your health
To ensure good health, you need to start planning early. Investing on a comprehensive health insurance plan is a great way to do that. With the spiralling cost of medical treatment, a good health insurance comes in really handy during a medical emergency. Safeguarding the family against such financial crisis is good planning.
Start planning for your child’s future
As per a nation-wide survey conducted by Aviva, planning for children’s education is the topmost priority for most Indian parents. However, proper planning is still far away for most parents and thus they end up in debt while arranging money for the children’s higher education. By taking the benefit of services designed for this purpose, parents will not only be able to recognise their child’s inherent talent but also be able to achieve their child’s dream with the education cost calculator that helps one calculate the expected cost of higher education and provides ways of investment to ensure availability of funds at the time of need.
Secure the future of your loved ones
Life insurance is fundamental to financial planning. Ensure that you are optimally insured and that the financial future of your family is secured. Assess the amount that your family would require to retain the same standard of living in the absence of the earning member and plan accordingly. A term insurance plan is extremely affordable, yet provides comprehensive security to the insured and his family*.
Clear your debts
The biggest roadblock of your financial plans is debt. Pay your bills on time and clear all your outstanding debts. Credit card dues attract a high rate of interest and hence, it is better cleared on time. Try paying off your creditors in cash and save money on interest.
Start saving before investing
Before making investment plans, get into the habit of saving. Cut down on unnecessary expenditure. You can also open a separate savings account for this purpose and use it as your piggy bank, or invest in an insurance plan that returns double the premium on maturity because money saved is money earned*.
Start saving for your retirement
You should start planning for your retirement by your late 20s. But if you haven’t done that as yet, you can start now. Saving for your retirement will help you ensure financial stability when you are beyond the reasonable age of working. Invest in retirement plans like Public Provident Fund, annuity plans, National Pension Scheme or insurance policies that guarantee return on the maturity of the policy.