It’s that time of the year again when you sit down and decide about your New Year resolutions. People’s resolutions range from the usual plan of hitting the gym to the unique ones of leaving your job and climbing Mt. Everest.
Most of the things in life require financial backup, so this New Year why not pass a resolution to secure your financial health? Read on to know some financial resolutions which you could follow in 2017.
- Straighten out your finances
This is the best way to start your new year on a productive note. Make a list of your EMIs, your expenditures, your debts to understand how much you should spend in one month. Next, prepare a list of all your investments. Go through them to see if they are delivering good returns or not. If you do these, you will realise whether you have a strong hold on your finances or if you need to become more disciplined.
- Pay off your debts
As the first point suggests, debts form a major part of your expenditure and can burn a big hole in your pocket if not paid off in time. You should try to clear those debts which have a high rate of interest, this will give you a peace of mind and then you can move on to tackle the smaller sized debts. Credit card bills, utility bills, and loans should always be paid off in time. It’s not just the case of higher interest being charged, you stand a chance to get a downgrade on your CIBIL score too.
- Learn to save before you invest
Investing is a necessary option to create wealth, however, you should learn to save first. As soon as you get your salary, remove a certain amount and put it another account. That’s your savings and treat it like it is someone else’s money so that you aren’t enticed to spend it. Ensure that you increase savings by cutting down on your spending. The amount which remains after savings is the one you should use to invest.
- Build an emergency fund
An emergency may strike you without any prior notice. It may be a medical emergency or some last minute dues you need to pay, you need to be prepared. Put a bit of money every month aside for this. An emergency fund should cover at least three to six months of expenses.
- Review your insurances
The start of the New Year is the right time to go through the insurances you are covered under. It can be health, home, car, and life, go through them and check whether you need to make some changes. Prepare early for the renewal process so that you can get better features, decreased premiums, and if it’s needed, how to switch insurance providers without any hassle.
- Prepare for your retirement
Every New Year is a year you inch closer to retirement. As you learn to save, learn to understand the basics of investing too. Regular investments compounded over time will deliver you terrific returns. Invest in schemes such as Unit Linked Insurance Plans (ULIPs), Mutual Funds, Traditional Insurance Plans, Public Provident Funds (PPF) and many other schemes.
Financial resolutions, when followed with focus and discipline, won’t just secure you in the immediate future but for decades ahead. Aegon Life is an excellent place to start with your investments. With nearly eight years of experience in India, we offer the one of the best insurance products so that you can create a sound a financial future.