As we near the end of the year 2018, it is that time of the year when there is nip in the air and it’s also the time to take stock of the year gone by. Yes it’s time to take review where we are on the fulfilling of the resolutions that we took in the year 2018 and also time to make some fresh resolutions for 2019 or may be carry forward a few ones from the past year. Here we focus on a few financial resolutions that you can make to make yourself financially robust.
Review your financial goals:
We all have financial goals; having goals is not sufficient as it is important that we review and evaluate them from time to time. So this year make sure you go through your financial goals to see if you are on track and also set new goals as requirements change with time and changing family dynamics. If you do not have any financial goals then it’s time to set them.
Contribute more towards your retirement fund:
As is common knowledge life expectancy is increasing and so is the cost of living and medical cost. This means not only will we live longer than our parents but will also need more to maintain a comfortable lifestyle. So it is necessary to contribute more towards your retirement kitty. Even a small increase will have a cascading and huge impact on the overall corpus.
Focus on your credit health:
This is something which is often ignored till we are not looking for a loan, but in 2019 you need to remedy this. Just like you need to do focus on your physical and emotional well being you need to focus on your credit health too. Doing this is now easy as you can get free CIBIL score once a year. Looking at your score and going through your report will let you assess your credit health and work on it if required.
Evaluate your insurance cover:
Sufficient insurance is very important and this is something that needs to be evaluated from time to time. With growing family responsibilities and also the changing lifestyle the insurance cover must be increased to ensure that dependents are not left with insufficient insurance cover due to lack of planning.
Assess your debt:
You should not only assess how much debt you have but also other aspects related to it. You might have personal loans running which may be at exorbitant rates; see if you can use some of your saved funds to pay them off. Also review the interest rate for you home loans and see if it makes sense to make a balance transfer if the current home loan rates are lower. However it is important that you make these decisions after weighing all the pros and cons.
Evaluate your investment portfolio:
Go through your investment portfolio to ensure that it is in line with your age and financial goals. When one is younger the portfolio must be more focused towards equity but with growing age one should reduce the equity portion and increase debt portion.
Make a emergency fund:
Emergencies by nature spring up on us unannounced. Despite us thinking that we have enough savings to deal with any emergency it is important that we have an emergency fund in place. If you have one then ensure that it is in line with your current earnings and lifestyle, ideally it should be enough to support you for six months. If you don’t have one, then start creating one right away.
Check if nominations are in order:
You may have various investments, some current some old. It is important that you go through all of them to see if they have nominations in them. With time somebody may have passed away or with changing family dynamics you might want to change the nominee at some places.
Involve your family in financial planning:
Finances do not have impact only on one person but the entire family thus it is important that your family members are also part of this planning. If it is your kids then it will be a valuable life lesson for them and they can also be involved in working out the budget and expenses. It is also important that the entire family be aware of their assets and liabilities.
Stay consistent and disciplined
Consistency and discipline is the cornerstone for both physical and financial health. So whatever resolutions you make they will be useless unless you are disciplined in following them. Being consistent with your resolution is also important, changing the goal post or making unrealistic goals will not help.
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