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Top Financial Goals For The New Year Resolution [2021]

Top Financial Goals For The New Year Resolution [2021]

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Financial Goals For The New Year Resolution

Financial Resolutions For The New Year – 2021

We worked hard, set our financial goals, kept up our investments, ensured we saved up money, and poof – Lockdown! Businesses are shutting, lay-offs across industries, salary cuts, volatile markets, and overall a lack of wealth mindset.

Nothing  prepares you for a financial crisis like coronavirus

Start with reviewing your current financial status and tracking budgets and expenses

One good thing to come out of the new normal routine is a macro-level understanding of your needs and expenses.

Loan EMI’s or Rent, Monthly bills, Groceries, Petrol and Commute, Food and Entertainment, Personal Shopping. You need to review and prioritize expenses, implement strict cost-cutting measures, and considerably reduce non-essential spending.

Pay attention to your EMIs and rent. Budget monthly expenses around this fixed expense to spend only on essentials such as electricity, mobile bills, groceries, and, household maintenance. Limit vocational spending and track your online shopping and online food costs. This doesn’t mean you become miserly. This means you make calculated expenses!

Yes, I’ve said it time and again! A classic example of value for money and savings are homemakers. Homemakers are experts at strict budgeting with inflation laden – daily expenses. They’re constantly on the lookout for deals, offers and only buy value packs, larger grocery packs to save on money. Even the smallest cost saved, is a saving!

Quick expense tracking tip – Divide your expenses across 3 credit cards. Use 1 for family, food & entertainment, 1 for personal shopping, and 1 for petrol. One glance at your bills should let you know exactly what you’re spending on!


MAINTAIN Cash in Hand Build and BUILD Emergency Fund

Your Account is credited! Cash in your bank account creates a sense of confidence and comfort level. It means liquidity to maintain the same lifestyle even during crisis times; but with strict budgeting. Keep minimal cash reserves at home and use UPI payments or cards for daily expenses. This reduces the temptation to spend, tracks your expenses, and ensures you’re sticking to the budget.

While you’re being careful with cash in hand, focus on building an emergency fund to be financially ready to beat Coronavirus. An emergency fund should have enough money to sail you through 6 months of mandatory expenses and basic investments. And yes, this money should be used ONLY FOR EMERGENCIES – unforeseen circumstances like medical emergencies.

QUICK EMERGENCY FUND TIP: If you don’t have one, start building your emergency fund with low-risk instruments such as overnight funds.


Liquidate as per requirement

Gold prices have crashed, expenses increased. But you don’t see households liquidating their gold in this crisis, simply because it has an emotional attachment. Treat your assets similarly, keeping long-term funds, stocks, and property last. Prioritize your financial instruments and withdraw from your investments only unless it is an emergency. Withdraw what you need, not out of uncertainty about that financial instrument. Chances are you’ve withdrawn from your investments without any avenues to invest and now your money is not growing!

Quick Tip: Liquidating money digitally, is easy, your funds arrive within 3-4 days in your account. Assuming you absolutely require 1 Lac for immediate purchase. Liquidate your emergency funds and check cash in hand, this gives you another 7 days to contemplate if this expense can wait. And only then liquidate Rs. 90,000.


Continue Investing – Don’t Stop, But DON’T BORROW to INVEST

Would you sell a piece of land you’ve bought, just because it had some infestation or issues? No! Then why are you so quick to sell your equity stock and mutual funds as soon as the market gets bearish? The most common mistake is to look at your mutual fund bought at Rs. 100 NAV, and evaluate it as a bad investment when it values at Rs. 80 NAV. Yes, the market sentiment may not look attractive, that does not mean you stop investments altogether


ENSURE You’ve got INSURANCE

Covid-19 has put health insurance back into perspective, raising bills up to 20 Lacs in some cases of hospitalization. This is definitely not the time to stop paying your premiums or discontinuing your insurance policies, only because your income is not steady.

Pay that premium and I would recommend, top it up! Health insurance policies of Rs.5,00,000 does not cover too much anymore. Choose insurance policies that not only cover general hospitalization, but also other health risks, illnesses, accidental emergencies, and even death. Especially, if you’re someone who has dependents, a term insurance plan is vital in your portfolio. The younger you are, the lower is the premium on a term insurance plan with a higher cover.

It’s great that your organization provides you with health insurance coverage. On a closer look, it might not be covering all illnesses or even your whole family. There are several Coronavirus related policies in the market right now. Pick a Corona Kavach policy to ensure coverage for you and your family. A COVID-related hospitalization could eat into your emergency fund and assets.

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