Today, 1st April marks the beginning of financial year 2016-17 and this is the time to take resolutions and to pledge for something better. This time, you should resolve to revisit your financial practices and strive for a better and secure future ahead. So, as we start the A2Z of Personal Finances, let’s talk of ‘Annual Financial Resolutions’. Here are five financial resolutions one must take for the year and life ahead:

1. I will pay off my higher rate debts
In a country where personal loans and credit cards bills are easily available on EMIs, we generally get trapped in debt and the interest cost adds to our monthly expenses. However, we don’t pay much attention to high-rated personal loans and credit card EMIs and we end up paying interests in the range of 15-24% per year. So, it does make sense to list down all our debt and ensure to pay the higher rate debts at the earliest opportunity.

debt

Those on top of the list, which in all probabilities shall be your credit card should be paid off immediately. So, make sure that before you invest any money, the rate of returns is higher than the debts outstanding. For example, If you owe Rs. 10,000 on your credit card and pay 18% interest annually (Rs. 1,800 per year), while at the same time, have also invested Rs. 10,000 with a 9% fixed deposit in a nationalised bank (Rs. 900 a year), one is able to actually save Rs. 900 a year by just paying the debt.

2. I will make monthly budgets
India is a country where expenses are prioritised before savings and people generally tend to save only if anything is left after our monthly expenses. Rather, the approach should be committing a minimum percentage towards savings and then allocating the balance income towards our monthly expenses. Let’s resolve to limit our expenses by making monthly budgets so that we know precisely where our hard-earned income is going. We shall also talk about budgeting in the coming posts.

3. I will invest in a Systematic Manner and not in March Next Year for Tax Saving
Many people in my phonebook contact me in March to guide them for tax saving instruments. However, the shortage of time generally restricts the options available and hence, they end up investing in the instruments with lower returns. Further, lump sum investment at the year-end strains the finances during that period too.

systematic_investments

Instead, plan for the savings in the beginning of the year itself and therefore systematic investments should be the first basket monthly income should go to. These small investments don’t make much difference on monthly basis and thus releases the pressure on the last months to save tax.

4. I will maintain an Emergency corpus
It is basically getting prepared for not-so-good times. It is considered financially wise to have an emergency corpus of around 6 months’ expenses and if you don’t have not yet created an emergency fund, making one should be your first step in this financial year. We shall discuss an effective way of creating and maintaining emergency corpus when we talk of Liquid Funds in the coming posts.

and last but not the least,
5. I will keep my financial resolutions
It is a fact indeed that majority of the resolutions are generally just for the day. Making and keeping resolutions are altogether two separate things. And I resolve that I will keep my financial resolutions for this year and for the rest of my life.

What is your financial resolution? Have a healthy financial life ahead.

Check out the A2Z of Personal Finance here.

28 thoughts on “Financial Resolutions for the Upcoming Year!”

  1. Good start Simardeep. I was looking forward to learning finance from this blog of yours. First post is awesome about importance of resolutions and planning. I am looking forward to know basics of finance this month.

    1. Hi Seeya, I hope A2Z of Personal finance does help you too. Even otherwise, I am just a message away.
      Stay tuned.

    1. Hi Dixita, Glad that you liked the post.
      Stay tuned for some cool money tips. 🙂

  2. Wow! Cool tips dude! I am saving this for future planning! Looking forward to more such tips and advice from you!

    1. Hi KR, Glad that you liked the post.
      Stay tuned for more money tips. 🙂

  3. Excellent advice. My accountant tells me to invest more so my tax bill is not so big, but I have to save to pay Uncle Sam.

    1. Hi Glenda. Glad that you liked the post. Do invest to reduce your tax bill, after all it’s your hard-earned money.
      Stay tuned for more money tips. 🙂

    1. Hi MG, Glad that you liked the post and yeah, do start thinking of tax planning right at the start of the year.
      Stay tuned for some cool money tips. 🙂

  4. Making financial resolutions for the New Year is a smart thing to do. It puts a person on the road to meeting their goals and controlling their own financial future. Other financial resolutions worth considering:
    ​Review utility bills — phone, Internet, cable TV, etc. — to look for savings opportunities via bundling, switching plans, etc.
    Review how your retirement plan assets are allocated and rebalancing them as necessary, preferably with the help of a financial planner.
    Review your credit history/credit score via the major credit agencies, looking for discrepancies, red flags indicating potential identity theft issues, unused accounts to close, etc.

    1. Hi Romila, Glad that you liked the post. I already have a few of your suggestions in my list to be shared all this month.
      Stay tuned for some cool money tips. 🙂

    1. Hi Shalini, Glad that you liked the post.
      Stay tuned for more money tips. 🙂

    1. Hi Preeti, Glad that you liked the post.
      Stay tuned for more money tips. 🙂

  5. Excellent piece of advice.

    Looking forward to read your post about investment for tax savings. We both know how well I fared on that front 😛

    Keep going with these posts.

    1. Hi Manpreet. Glad that you liked the post. A post on tax saver investments is also planned this month. Anyways, you know I am just a message away otherwise for such issues.
      Stay tuned for more money tips. 🙂

    1. Hi Rohan, Glad that you liked the post.
      Stay tuned for more money tips. 🙂

    1. Hi Emma, a wonderful insight for being more happier with lesser worries. That is what we all strive for.
      Stay happy. Stay blessed and stay tuned for more money tips.

  6. I’ve learned that it’s best to start all this planning whilst we are young.
    If not, then later it gets tougher to get everything as per plan.
    Starting early is like giving yourself a head-start!
    Thanks for sharing this post.
    It surely shall give some people a realization!
    @Lanzomaniac via One Sun, Many Rays

    1. Hi Lancelot, glad that you liked the post. It surely helps if you start young but its never too late to start something good and beneficial.
      Stay tuned for more money tips.

    1. Hi Shalini.
      The theme was indeed chosen keeping the same thing in mind. Glad that posts are conveying that intent.
      Stay tuned for more money tips.

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