X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
8 New Year Resolutions To Keep You Financially Fit in 2018 - Outside View by PersonalFN
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

8 New Year Resolutions To Keep You Financially Fit in 2018
Jan 2, 2018

Many of us begin our new year with new hope and new start.

It's that time of the year when you realise that you need to look after your health or lose or gain weight to stay fit.

Is hitting the Gym early morning or adopting keto diet your way to lose your weight...on the list of your 2018 New Year Resolution?

But what about your financial health?

Do you feel you did not save much in 2017? Or You eventually landed up in a debt trap?

Then along with your physical health goals, you need to resolve to adopt financial discipline and invest sensibly to keep your financial health in the pink.

So, here are 8 New Year Resolutions we insist you keep and follow to lead a healthy financial life:

Resolution #1: I will increase my savings every month

The best way to figure out how much more you can save every month is to look at your avoidable expenses and see what can be rationalised.

You can classify each of your expenses as avoidable and unavoidable.

Unavoidable expenses are your daily expenses such as your rent, utility bills, house maintenance charges, food, etc. Loan obligations and healthcare expenses (regular health check-ups, doctor's fees, hospital fees, etc.) can also be counted under unavoidable expenses.

Avoidable expenses on the other hand are your leisure & lifestyle expenses which includes - dining out more often, movies on weekends, shopping beyond basics, holidays, etc.

Take a close look at both categories, and see how you can best save your hard-earned money.

A prudent budgeting exercise can help you save more.

Ideally, as Warren Buffett says, "Don't save what is left after spending, but spend what is left after savings".

Resolution #2: I will set a financial plan

If a wish fulfilling Jinni asked you to wish for an ideal life you always dream of, what would it be like?

Would it be like buying 4bhk house in next 3 years, a car, providing the best education to your children, getting them married in pomp and style, going abroad on a leisure trip, and live the golden years of life in bliss.

Or would it be about you settling in a peaceful small town and retiring early at the age of 40 years?

Whatever you dream off, rationally, may be possible - if you have a proper financial plan in place.

A financial plan provides a roadmap to achieve these financial goals. And to make your dreams come true, investing your hard-earned money in accordance to your financial plan is imperative.

Our Certified Financial Planners have helped many individuals customise their Financial Plan. Click here to book a call with our investment consultant now.

Resolution #3: I will start SIPs to achieve my financial goal(s)

Just like healthy lifestyle, your investments require discipline. You cannot build a fortune in a day's time.

Hence, for systematic wealth creation over the long-term, Systematic Investment Plans (or SIPs) offered by mutual funds are a good mode. Like recurring deposits, SIPs too work on the simple principle of investing regularly.

With SIPs your money gets invested either daily, monthly, quarterly in mutual funds.

You can calculate the value of your monthly SIP with our SIP Calculator by just entering a few details such as the monthly SIP amount, the SIP tenure and the compounded rate of return you expect.

Here are 5 key benefits of investing via SIPs:

Resolution #4: I will 'protect' my family's financial future

Life insurance is fundamental to financial planning and financial health. As a bread winner of the family, ensure you are optimally insured and safeguard the financial future of your family.

To optimally safeguard the interest of your loved ones and dependents, you need to properly assess your 'Life Value'. Insurers call it 'Human Life Value' (HLV). Use PersonalFN's HLV Calculator to assess the amount that your family would require to retain the same standard of living in the absence of the earning member.

A pure term insurance plan is by far the best to indemnify risk to life, given the core objective of insurance.

Likewise, as the cost of healthcare is getting dearer, make sure you have sufficient health insurance (commonly known as Mediclaim) even if you may be in pink of health today. Buying a Mediclaim policy also offers tax saving benefits on premiums paid under Section 80D.

Resolution #5: I will maintain enough contingency reserve

Contingency Reserve is the amount you should keep aside in your savings bank account and/or liquid funds for an emergency. Exigencies such as loss of job, medical emergencies, etc can easily impact your personal finances.

It is best to maintain a minimum 6-24 months of regular monthly expenses, including EMIs as a contingency reserve. This will enable you to be prepared and cover expenses during hard times.

Resolution #6: I will attempt to maximize tax saving

Tax planning is a holistic exercise that you, the tax payer, engages in by accounting for all payables, permissible exemptions, deductions, and reliefs available under the provisions of the Income-Tax Act. Hence, adopt a prudent tax plan since the beginning of the financial year and avoid procrastination.

And mind you, there's more to tax planning under Section 80C of the Income-Tax Act, 1961. So, take assistance of a tax expert and legitimately use the provisions of the Income-Tax Act.

Download PersonalFN's latest Tax Planning Guide (2018 Edition) now. It's Free!

Resolution #7: I will minimise debt

All of us avail of loans at some time or another in our lifespan. Some of these loans such as home loans are considered good, because it leads to creation of an appreciating asset and you also enjoy tax benefit on it.

But over time you should aim to lower your debt burden as far as possible. Reducing debt can aid you to save more and invest wisely towards your key financial goals.

And if you are planning to take a loan in 2018. Use this simple EMI calculator to estimate your monthly instalment payable.

Resolution #8: I will consult an expert

Often, it pays to seek the opinion of experts, be it any facet of life - including personal finance. The "I know all" approach could prove detrimental in the absence of correct know-how and resources.

Experts possess sharp insights and thus can guide you astutely and correct you. Don't get dithered by the fees, as long as it is in the interest of your wellbeing. Remember, that it won't do you any good to be penny wise and pound foolish.

Do not forget, every investor needs a guardian today, so make sure you hire your Certified Financial Guardian today!

To conclude...

"No one's ever achieved financial fitness with a January resolution that's abandoned by February", says Suze Orman an American author, financial advisor, motivational speaker, and television host.

This year pledge towards fitness of your Financial Goals and lead a healthy financial life.

Wish you A Very Happy & Prosperous New Year!

This article first appeared on PersonalFN here.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

Disclaimer:

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "8 New Year Resolutions To Keep You Financially Fit in 2018". Click here!

1 Responses to "8 New Year Resolutions To Keep You Financially Fit in 2018"

gawai

Jan 2, 2018

very nice.

Like 
  
Equitymaster requests your view! Post a comment on "8 New Year Resolutions To Keep You Financially Fit in 2018". Click here!

More Views on News

What They Forgot to Tell You About Sensex at One Lakh (Smart Contrarian)

Nov 29, 2017

Stocks that could beat Sensex returns in the long term.

How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

Jun 10, 2017

Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

Have You Submitted Your Tax Saving Investment Declarations? (Outside View)

Feb 17, 2018

PersonalFN explains the care to be taken while submitting tax saving investment declarations.

The Foundation for Sensex 100,000 is Laid (The 5 Minute Wrapup)

Feb 17, 2018

Top three reasons for Tanushree's presentation at Equitymaster Conference to be centered around a possible 30% correction.

Vignettes From Ireland (Vivek Kaul's Diary)

Feb 17, 2018

Bill bonner discusses how the US government have created a phony picture of the real condition of the country.

More Views on News

Most Popular

Here's What You Should Do in this Market Crash(The 5 Minute Wrapup)

Feb 6, 2018

The market correction has provided a golden opportunity to buy five high-quality safe stocks.

As the Market Corrects... It's Time to Buy More(Smart Contrarian)

Feb 5, 2018

The recent sell off in the stock market offers buying opportunity in some quality small caps.

The Era of Easy Money is Coming to an End. What Happens Now?(Vivek Kaul's Diary)

Feb 9, 2018

The easy money policy of the Federal Reserve of the United States, which drove up stock markets all over the world, is ending, with the Federal Reserve looking to shrink its balance sheet.

When Small is Not Always Beautiful(Chart Of The Day)

Feb 6, 2018

Big companies enjoying tax deductions and exemptions have an edge over the small companies.

What Should Mutual Fund Investors Do After LTCG Tax Norms(Outside View)

Feb 6, 2018

PersonalFN explain what investors should after LTCG tax norms.

More

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Feb 16, 2018 (Close)

MARKET STATS