What About New Year Financial Resolutions?

Although a majority of fresh years begin with new resolutions, only few incorporate financial resolutions. Let us therefore set financial resolutions to achieve a financially sound 2023. This article will assist you in this regard 

The start of a new year is an excellent opportunity to set objectives for yourself, particularly in terms of personal finances. Starting with a blank slate and developing a strategy for the financial goals you wish to achieve will allow you to strike the ground running in 2023. Personal finance or financial planning is frequently at the bottom of the priority list for the majority of millennials or even adults. 

The significance of personal finance cannot be overstated, yet many people ignore it until they reach a critical juncture in their lives. Even if someone wants to prepare for the future, a lack of information or just procrastination prevents them from doing so. For once, let us shift our perspective and greet 2023 with newfound optimism for your present and future. Let’s take a look at some of the most important financial resolutions you should make.

Give Up on Herd Mentality



Humans have a natural desire to follow their friends, family, or even advise from strangers without questioning its genuine intent. Every person has varied ambitions, requirements, dependents and income. There is no one medication for all diseases and there are various drugs for different people with the same sickness. Similarly, a financial plan may be adequate for some but completely inadequate for others. As a result of his or her financial situation, each individual requires a tailored plan to fulfil his or her financial goals.
 

Set Realistic Financial Goals



The goal of your first day at the gym should not be to come out with six pack abs. Similarly, purchasing a car within six months may not be realistic if your finances are inadequate. Investment and goal attainment are long-term processes that need determination and fortitude. Because it is practically impractical to save 100 per cent of your income, you may use budgeting to set aside certain sums to reach those goals. However, if you have a large difference between your savings and your financial goals, the effect will be superfluous.
 

Gradually Increase Savings



Savings and investing go hand in hand when it comes to accomplishing any financial goal. However, if you do not raise the amount of savings and investments, the effects may be delayed. Financial goals are frequently met in 5, 10, 15 or even longer time frames in the event of retirement. During this period, the cost of your goals continues to rise due to inflation, lowering your spending power. As a result, one strategy to meet your goals on time is to consistently boost your savings and, as a result, your investments. 
 

Keep Debt in Control

Today’s iPhone may hinder tomorrow’s car buying. Attractive shoes may seem too enticing to pass up, but when we consider our financial goal, resistance may be pointless. Sticking to your budget and avoiding debt traps is a financial goal half accomplished. Debt usually comes with interest payments. Consequently, prioritise and pay off high-interest debt. It is critical to avoid adding to the debt by taking on new ones while paying it off. It is critical for good financial planning to keep your debts below 40 per cent of your income.
 

Have Important Insurances in Place



Brainwash yourself on the necessity of medical and life insurance since they must be included in any financial plan. Medical costs in our country remain exorbitant,and with our detrimental living patterns, any ailment can knock on your door. Furthermore, the same cannot be said for your dependents. Hence, not just any medical insurance, but one that meets yours as well as your family’s requirements must always be in effect. Similarly, in an unpredictable world, life insurance must be a top priority as the show must go on.
 

Build an Emergency Fund



Being insured is insufficient since illnesses might jeopardise your life and a recession or conflict can threaten your work. As a result, having an emergency fund is essential for having self-security in the event of job loss or unanticipated needs such as house upkeep or repairs. Furthermore, missing or late payment of EMIs might harm your credit score and may result in an increase in escalating interest rates as a result. 

Plan the Tax Outgo



Trying to run away from it will not be helpful. Instead, embrace it to save money. We may feel safe avoiding it, but it stings when our earnings are butchered in the name of tax deducted at source (TDS). As a result, better late than never, plan your taxes to protect your Income Tax. Lack of information is fine but hiding from the professionals and not learning how to properly plan your taxes is not.

Conclusion

Finally, your money should outlast a lifetime. Pay close attention to your retirement fund since you will require money for your health, routine costs and other necessities once you have retired from active employment. A strong financial strategy may be used to establish this fund. Furthermore, after you have decided on the goals you want to achieve in 2023, write them down, consider them into your budget and make sure to check in on your progress on a regular basis to see if there are any areas you need to tweak to make them a reality.

Write down your financial objectives in a notebook, in your phone’s notes app or in an email to yourself. This promotes responsibility, prioritises and measures success by providing something to refer to throughout the year. New years are often filled with anticipation for the next year. Uncertainties make our life fascinating and full of thrills. Nevertheless, in financial planning, it is preferable to keep the thrills at bay and have a safe, though dull, but secure future. As a result, make 2023 a watershed moment in your financial planning and a catalyst for the next year.