Six Financial Resolutions for 2021

Published by Sharekhan Education | November 5, 2021

Six Financial Resolutions for 2021.

“I am going to exercise daily at the gym” was the firm resolution made by Bunty as the year 2020 turned its final page and “what about you Babli?” he asked. Reminds you of yourself don’t it? Every year as the New Year sets in don’t many of us relentlessly go about making some new resolution or not? The resolutions; to adopt healthy lifestyles, quit smoking or even start on a new diet. Such resolutions are great but it’s time we went a step forward and made some financial resolutions too.

The year 2020 was one of its kinds wasn’t it? The challenges it brought needs no mention. Remember the year has changed not the situation. We are still amidst the pandemic and waiting for the vaccine to be administered. So along with the resolutions to lose weight or quit smoking we need to make some on the personal finance front too. We need to build a safety net for ourselves and our families, so depending where we stand financially we need to make a few financial resolutions that can help us improve our financial fitness in the year 2021.

Have an emergency fund in place:

The pay cuts, delayed salaries, job loss during the pandemic highlighted the importance of having an emergency fund in place. So resolve to have an emergency fund in place, don’t wait for contingencies to happen to build that most important emergency resource. In case you have already utilized your emergency reserves during the current pandemic then it’s time to rebuild and bridge the gap as soon as possible.

Maintain adequate risk cover:

It’s time to relook your insurance portfolio and enhance your health and life cover. Ensure you and your families are covered with adequate health insurance to meet any unexpected medical expenses.

Make a budget you can stick to:

The Pandemic has taught us many money lessons and the most important one is to live within our means and do away with wasteful expenses like dining out, partying etc. So this year resolve to reduce your expenses further. This is possible only if you make a budget and strictly stick to it. A budget will help you spot the wasteful expenses from the essential ones and will enable you to create that much needed surplus to meet your future financial obligations. It would be helpful if you make a budget which you could stick to, avoid overzealous ones which may be difficult to adapt and continue.

Plan and prioritize your goals:

List your financial goals and prioritize them. Develop an investment plan based on your goals and risk profile and channelize your surplus towards achieving your financial goals. Disciplined investing will help you meet your goals.

Reduce your debt burden:

Aim to prepay your loans fully or partly this year. This will help reduce your debt burden; you will not only save on interest payments but also create an additional surplus which can be channelized towards other important goals like your retirement.

Gain financial awareness:

Read financial newspapers and magazines, attend financial awareness programs and stay updated with market movements. This is very important to stay financially fit. Keeping abreast with market movements will help you take informed financial decisions and shuffle your portfolio maybe in time to avoid serious losses due to unwanted market corrections.

These Financial Resolutions will prove useful as the pandemic continues and may help you and your families face current challenges. But do not forget to wear a mask, regularly sanitize your hands and maintain physical hygiene. Remember for the virus it does not matter whether it is 2020 or 2021. It’s still a long way for a virus free era and we will have to continue with this new normal for some more time.

With hope that 2021 will be better than the previous year; wishing you all a very

Happy New Year …

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