Eight Financial New Year Resolutions for 2022
Exercising or dieting isn't the only way to keep your resolutions in the new year. Making a financial resolution can help you improve your finances and become financially secure in the long run. But that needs to start with some essential financial to –do list. This article outlines eight financial resolutions you can take in 2022 to get more control over your finances.
Financial New Year Resolutions
1. Create a Realistic Budget
Many people are on top of their incomes but seldom know where their money is being spent. That's where budgeting helps. Creating a list of your recurring expenses and ordering them from most to least important can help you manage your money. For instance, rent, food, and living expenses are unavoidable. You can then set aside specific sums for other requirements like entertainment and leisure by planning for these. You can download apps that can help you with budgeting. The goal should be for your expenses to be lesser than your income.
2. Start Saving
If you don't do it already, make the financial resolution to save some money this year. It can be instrumental in the long run. Ideally, you should be able to save at least 20% of your monthly income. If that isn't possible, save whatever you can. The best strategy to follow would be to pay yourself first every month or keep a small amount aside before making your monthly expenses.
3. Build an Emergency Fund
You never know when a financial emergency may strike. You could have a health emergency or a job loss, thereby losing regular monthly income. Having an emergency fund can help you tide over such situations. This year, make the financial resolution to start building an emergency fund with at least six months’ worth of expenses.
Additional Read: Opening a Demat Account to Invest in Mutual Funds
4. Buy Insurance
Most people underestimate the importance of insurance. Having health and life insurance are vital aspects of financial planning. If your job doesn't cover health insurance for you, then make it a point to get coverage yourself. Similarly, buying life insurance can be a great long-term financial plan not just for you but also for your dependents.
5. Pay Off Your Credit Card Bills
If you’re the kind who has mounting credit card debt, then make it your new year’s resolution to pay off as much of it as you can. Credit card interest rates are exorbitantly high. Clearing your credit card debt can leave you with more money to save and invest.
6. Begin With an Investment Strategy
Savings and emergency funds are great, but they can’t help you create wealth. To beat inflation and have a financially secure future, you need to start investing. If you don't know where to begin, seek the help of a financial planner or investment advisor. Having a sound investment strategy as part of your financial planning can help you build wealth and prepare for the future.
Additional Read: How to Use Mutual Fund Investment for Financial Planning
7. Plan Your Taxes
It is common for people to wait until the last minute to file their taxes. This can be counterproductive to your financial goals. When you plan your taxes right, you can make suitable investments and financial decisions that can help you save money. You may often find that you are also eligible for a refund. So make it your new year's resolution to learn about taxes and file them smartly so you can save extra cash.
8. Work Towards Retirement
It’s never too soon to begin retirement planning. With average life expectancy increasing, there’s a good chance that you will live a long time past your retirement age. This means you need to have enough corpus in place to retire comfortably. Check out different retirement investment options and make a realistic retirement plan a part of your budgeting and financial planning starting this year.
A sound financial plan is a part of an overall healthy lifestyle. Now that a new year is here, you can use this opportunity to make solid financial resolutions. It may be more beneficial to consult with a financial planner if you find setting your own financial goals difficult.
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