Sometimes life shifts us in ways we don’t anticipate, so a customized piece of financial security helps in the long run. Below are 10 resolutions you must take this season to lead a secure life for you and your family as well.
Start investing and invest more
A healthy financial life requires you to start saving and investing regularly. Have a goal-based financial plan and choose investment products that fit your goal, don’t invest in instruments just because it flashes on your TV screen or because a lot of people are investing in it. Do your own research as financial health and income differ from person to person.
Pay off your debt
Paying off your debt is essential, start with paying off smaller debts like your credit cards, etc. You can also try making one extra payment for your EMI’s and by doing this you can reduce the tenure of your loan by 4-5 years. If you have huge debts then you must consider consulting a finance professional to restructure your loan for a lesser interest rate and plan your finances correctly.
Re-evaluate your health and life insurance
When an insurance policy is well-tailored to you and your circumstances, it can serve as a robust safety net. Always have adequate health and life insurance at all times. You never know what one disease can do to your family finances and sometimes death can create a huge financial mess with all loans and no insurance. Every time there is an alteration in your income, family size, marital status, or debt, it is a smart time to re-evaluate your insurance.
Reassess and boost your retirement savings
When you are young h, saving for your retirement probably sounds like the least interesting thing but the truth is, the sooner you start bigger will be your retirement corpus. A lot of people are concerned about not having enough funds for their retirement, it is important to know your expenses at retirement in order to understand how much to save.
Start an emergency fund
An emergency fund is one of the most crucial aspects of a financial plan. The thumb rule states that you should have 6-8 months of your income as an emergency fund. Adding funds to this regularly helps in the long run and has to be created gradually. An emergency fund should be in a debt fund or any fund that can be liquidated easily in case of any contingencies.
Create an alternate source of income
Make your money work for you while you are asleep, don’t keep it idle in your bank account or in your cupboard. Diversify your investments to earn passive income, it will help a lot when your active income stops. Creating an alternate source of income also gives you the freedom to choose when you want to retire and how much money you can make post-retirement. So choose the right investment product which will safeguard you and your family.
Create a will
A will is critical in Financial planning and mustn’t be postponed to a later date unnecessarily, don’t be fooled into thinking that a will is for old people. A will reduces the chances of disputes among the family members in the near future. Hence with proper financial and succession planning, you can distribute your wealth as per your wish.
Define your long-term goals
Sometimes you get so caught up in your current financial situation that you forget to plan and invest in your long-term goals. Most people are always busy fulfilling their short-term needs which hamper their long-term vision. Long-term goals can take some time for planning, so make your goals measurable so that you can track your progress and understand the results you achieve.
Pay your taxes on time
Getting your tax done early reduces a lot of unnecessary stress, and paying advance tax can help you reduce your burden during the peak tax season, especially for those with multiple income streams. If you need help with tax planning, consult a professional for the correct advice and services.
Consult a professional
Consulting a professional vs doing it on your own has a huge difference, let the experts do their job while you focus on yours. They are the right people to advise you and protect your finances from any problems that may arise. A systematic and customized financial plan gives you the ability and opportunity to understand your finances and simply not follow the herd.
Follow these financial resolutions this Diwali and eliminate all negative financial habits and lead a healthy financial life.
Text – Mahesh Pai