|Chennai||Rs. 25020.00 (0.81%)|
|Mumbai||Rs. 25890.00 (0.98%)|
|Delhi||Rs. 25200.00 (-0.2%)|
|Kolkata||Rs. 25480.00 (1.03%)|
|Kerala||Rs. 24800.00 (0.61%)|
|Bangalore||Rs. 25000.00 (0.81%)|
|Hyderabad||Rs. 25080.00 (1.09%)|
The New Year is generally associated with optimism and positivity. The beginning of the year is when you can start afresh and make changes to all the unsuccessful personal finance practices adopted by you in the previous year. Thus the New Year is characterised by people making resolutions, with the hope that these resolutions are followed. Personal Finance is a common area where people make resolutions, with the intention of reducing expenses and saving more.
Create your own personal finance statement - Start off by doing a reality check on where you stand financially by drawing out your own personal finance statement. This should income all your income sources, your expenses, your investments, insurance policies etc. with complete details of each head. You should also list down your loans and the interest paid on each loan. You can then compare the interest rates of your loans and investments, and take informed decisions. If you do not know your present financial condition, you cannot plan for the future. Take the first step by making your own statement and doing a rigorous progress-check regularly.
Control expenses by avoiding impulse spending - Impulse spending is the main reason for worsening financial health. It refers to spending impulsively without any forethought, purpose and planning. Some people have the habit of purchasing things they don't even need, simply because they find it attractive. This habit naturally leads to higher monthly credit card bills and lower cash with you. You can aim at avoiding impulse spending by unsubscribing from online shopping emails, avoiding shopping just to kill time and being stricter with your children. This New Year, resolve to spend less and save more.
Invest more of your income - When you spend less and save more, you have more cash left with you for investments. Aim to invest the maximum possible extent this year, on a monthly basis. The more you invest in the initial years of your career, the higher will be your long term corpus. Set a savings goal this year and track your progress on a monthly basis.
Create a budget and stick to it - This is one of the most common resolutions taken by people, and the most broken resolution too. It is very important to create an expense budget, note down actual expenses and analyse where you have missed targets. It may be difficult to stick to targets initially, but as time passes, you will realise that there is a huge change in your expenditure pattern which is reflected by the discipline in your finances.
Bring down debt - This should be another important resolution, as high debt on the books means a huge cash outflow towards interest. Start off by paying down your credit card bills and personal loans, as these carry very high interest rates. Use your annual bonuses and benefits in a wise manner, by paying off such loans. If you have surplus cash, you should consider part pre-payment of bigger loans like vehicle loans and home loans. Home loans should especially be analysed carefully as this can be the longest debt of your life. Scout for better interest options in the market and aim to reduce the total term of the home loan to save on interest cost.
Cut down on unused, unnecessary cards - It is often seen that people carry several credit and debit cards in their wallet, most of which they don't even use. Owning multiple credit cards from different banks is viewed as a status symbol by many people. While having a debit card and credit card is imperative in today's world of plastic money, owning beyond one's needs and means is foolish. You should not hold more than you can afford in order to enable easy tracking of payments and efficient money management. This year, look at cancelling all your extra credit and debit cards.
Build an emergency fund - A contingency fund refers to a corpus which you can easily access in case of an emergency like a job loss, loss of pay or a sudden accident. Experts advise to hold at least 6 months of expenses in an emergency fund. If you do not have a contingency fund, resolve to start building one this year. It need not be built overnight. Make regular investments and gradually build a corpus which is liquid and still earns returns for you.
Learn something new about investing - A person feels empowered when educated. A person, who has knowledge on any subject matter, becomes an expert over time and takes better decisions. This year, empower yourself by learning something new about investing. It can be as simple as subscribing to a personal finance magazine to read personal finance columns and investment articles, or more complex like enrolling in an education programme which teaches investors various aspects of investing.
Take each of the above resolutions seriously with an honest intention to improve your financial position this year. Start with small steps and progress gradually to achieve your financial goals.
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