Finally! 2020 – The year that took us all on a surprise roller coaster ride came to an end.
The Pandemic of 2020 has taught us more financial lessons than we would have learnt in our entire lifetime. I have personally learnt some of it the hard way like most of you here too would have.
Hence, I have decided to start afresh and emerge financially strong by making steady resolutions for 2021.
Financial Resolutions In New Year Of 2021
I am sharing some of my resolutions with you in this article. If you too want to make the best of your financial life in 2021, feel free to make them your own.
1. Create an Emergency Fund
A year ago, I had not realized how important an emergency fund was.
Whenever I was asked to create one, I’d say “What can happen so suddenly that I will require an emergency fund?”.
Well, by now, we all know what.
We can never predict what will affect our finances next, which is why, it is best to put away some money that will cover the expenses for the necessities such as food, shelter etc. for at least 3-6 months.
This money can be put away in a highly liquid fund such as a post office savings or a savings bank account. And can take 6-8 months to come together.
2. Set Up Automatic Bill Payments
We know the consequences of late payments – interest, penalty and what not. Suppose your bills are paid automatically every month, imagine how much money you can save.
You & I can achieve this by automating our bill payments.
It is a super simple task:
Just mark your calendar for a reminder to make payments a couple of days ahead of payment date and ensure you have enough balance in your account.
3. Set Aside ‘Money Time.’
We humans often ignore the need to think of money.
But doing so can do wonders for us.
Put aside a minimum of forty-five minutes to one hour a week as ‘money-time’.
During this dedicated time, you (and your partner) can go through all your bills, savings, investments and plan for the next week. Make this a habit and automatically tracking your finances will fall in place.
4. Maintain A Budget
Budgets help to gather your finances and plan effectively.
Make a monthly or weekly budget of your income, savings and expenses. Make sure your budget is practical. See where and when you can cut down on unnecessary spending and allocate that money into savings.
Stick to the budget. And try not to extend your expenses beyond your account. If you don’t like to maintain spreadsheets, you can try your hand at budgeting apps available in the market.
5. Pay yourself first
Or in other words, put your savings first.
Whether you want to invest in deposits, mutual funds, stocks, cryptos or in everything make it your first expense. As soon as you receive payments, make it a point to set up an automatic transfer of a fixed sum to your investments.
Account for savings in the beginning. So you would not have to struggle to save at the end of the month after all your expenses.
6. Save To Treat yourself
As the new year begins, we would have new goals or things we would like to achieve or buy, like a car or a holiday. Most of us have the habit of taking a loan on such purchases and then paying EMI.
This year make it a point to treat yourself with purchases only using your savings.
If you plan to buy something, start ahead and put away some money in short term investments to raise capital for it. This way, you can enjoy your treat without worrying about loans hanging over.
7. Add More To Your Retirement Fund
Investing for retirement is essential.
If you have already started investing for retirement – great!
You can focus on adding more to the current investment – because of the more comfortable your retirement, the better.
If you have not started, I urge you to make this a top priority.
Even if you have just started your career, it is never too early to invest for retirement. Even if you can allocate a small amount of your income, it can do wonders in the long run.
8. Invest In Something New
This new year can be the year in which you expand your financial horizons. Make it a point to invest in a new investment class this year. If you have been just saving, you may decide to start investing in a deposit.
If you are already trading in stocks, you may consider investing in cryptocurrencies. Since I have already been investing in cryptocurrencies, I have resolved to start allocating a little more towards it. (not financial advice)
I know that resolutions are a bit hard to stick to, but the reason for that may be that such resolutions are farfetched. No matter what your financial resolutions for this new year are, make sure they are SMART.
- S – Specific
- M – Measurable
- A – Achievable
- R – Realistic
- T – Time-Bound
If you have any other financial resolutions for this new year, share it with us on our Twitter.
Wishing you a Happy & Prosperous New Year!
[su_note] KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing. [/su_note]
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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