Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 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 for a financially successful 2015 - Outside View by PersonalFN
8 New Year resolutions for a financially successful 2015

Most of you would have made some plans for the upcoming New Year's Eve. We all wish to welcome the year 2015 with happiness and joy in our hearts. However, it is necessary that we also work hard in the coming year to improve our financial health and to come closer to achieving our dreams and ambitions.

PersonalFN has listed down some resolutions which all of you must adopt to achieve financial success.

  1. I will be well prepared for emergencies

    Some emergency situations such as loss of job, medical emergencies and so on can lead you to break your investments. Hence, it is imperative to maintain some contingency reserves (minimum 6 to 12 months of your expenses) in a savings bank account or liquid fund. These contingency reserves should never be used for meeting any unimportant expenses or bills and should be reserved only for unforeseen circumstances.

  2. I will make a list of all my financial goals

    Metaphorically speaking, unless you know where you are headed, you won't get there. Hence, it is important to make a list of all the goals that you wish to achieve. Also, involve your family while undertaking this activity as their inputs and support will be extremely imperative in setting and achieving your goals. Please remember, simply listing down your financial goals is not enough. You need to determine how much money you would require in today's terms to fulfill your goal; and what is your time horizon for achieving them. Thereafter, calculate the future value of your financial goals, after taking into account a realistic inflation rate. In short, make sure that your goals are S.M.A.R.T - Specific, Measurable, Adjustable, Realistic, Time Bound.

  3. I will chalk out a suitable asset allocation pattern

    Once you know the amount of corpus you would need to achieve your goals, you must chalk out a suitable asset allocation pattern. Asset allocation refers to distributing your investible surplus across asset classes such as equity, debt, gold, real estate in a pre-defined proportion. This is important as it may help you earn adequate returns, minimise your risk and taxes, have sufficient liquidity in your portfolio and also help your investments align as per the time horizon of your financial goals. Once, your asset allocation pattern has been determined, you must calculate the amount that you need to save and invest per month to achieve your financial goals (taking into account a realistic rate of return on different asset classes). Also, keep reviewing your asset allocation pattern from time to time to make sure that you achieve your financial goals in time.

  4. I will review my existing investments

    Before making any fresh investments to achieve your objectives, you must review your existing investments to analyse if they are well suited to your risk appetite and financial goals. This will also help you understand the amount that you need to invest further for the fulfilment of your financial objectives. Remember that, making ad-hoc investments or keeping unsuitable products in your portfolio can harm your and your family's long term financial well-being.

  5. I will take informed investment decisions

    You must make sure that you never invest in any investment product randomly on the basis of incomplete information or just because everybody else is investing in it. Remember that, every individual has a different risk taking ability and different time horizon for investments. Moreover, PersonalFN is of the view that a research oriented unbiased approach should be adopted every time you make any investment.

  6. I will adhere to my expense budget and keep my debts in check

    You must create a budget for all your personal and household expenses and make sure everyone in the family sticks to it. This is extremely important if you wish to fulfil your dreams and wishes in life. It is also necessary to keep your debts in check. Remember that using credit cards or opting for loans is not bad as long as you have the means to service it. If your habit of spending extravagantly lands you in a debt trap, then it would be extremely difficult to meet your financial goals and keep your financial health in pink.

  7. I will protect the future of my family

    If you are the only earning member in your family, then the financial future of your family is dependent on you. Hence, it is extremely important that you analyse whether you have a suitable insurance policy and have adequate insurance cover that can take care of the needs of your family in your absence. If not, then it may be a high time for you to cover yourself adequately with a Term insurance policy. At PersonalFN, we believe Term insurance policy is the best option for safeguarding your family's financial future and thus you should never mix your investment and insurance needs. It is also important that you and all the members of your family are covered with a suitable health insurance policy as medical expenses can burn a huge hole in your savings.

  8. I will take the help of a financial planning expert if I need to

    If you can determine a suitable asset allocation pattern, review your existing investments, decide on where and how much to invest, take an adequate life and health insurance policy etc. all by yourself, then you don't need the help of a financial planning expert. However, if there are any of these things that you can't do yourself, then you definitely and immediately require the services of an unbiased and qualified financial planner. Remember, that it won't do you any good to be penny wise and pound foolish. In other words, don't let the fees charged by the planner deter you from availing his or her services.
PersonalFN is of the view that if you sincerely adopt the above mentioned resolutions, then your dream of living a stress-free financial life can easily become a reality.

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

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 for a financially successful 2015". Click here!


More Views on News

The Right Financial Advisor Is Around the Corner (Outside View)

Mar 10, 2016

An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.

Why financial planning should be dull and boring (Mutual Fund Corner)

Feb 29, 2016

Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.

What Are E-Wallets And How To Use Them (Mutual Fund Corner)

Feb 12, 2016

PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.

Is Consumption Boom Over In India? (Mutual Fund Corner)

Feb 2, 2016

Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.

How to Find a Saint Amongst Sinners? (Mutual Fund Corner)

Feb 1, 2016

Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.

More Views on News

Most Popular

This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

Aug 17, 2017

A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

Aug 21, 2017

Most Indians who cannot find jobs, look at becoming self-employed.

It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

Aug 16, 2017

The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

Aug 22, 2017

Post demonetisation, a cut in bank savings deposits rates was in the offing.

5 Steps To Become Financially Independent(Outside View)

Aug 16, 2017

Ensure your financial Independence, and pledge to start the journey towards financial freedom today!


Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms