Kolkata, December 27 : It is that time of the year when resolutions are made. The thing with resolutions, we all know is that they are difficult to stick to. However, even if one is serious and sticks to some of the resolutions, it can bring about a positive change in one’s life. Here, we will talk about some financial resolutions you should make for 2020. You may already be following some of these, but if you are not, this is the best time to start.
Add to your emergency fund: Even if you have an emergency fund, make it a point to add to it. If you have spent money out of your emergency fund and it has fallen below the required limit, make a point to replenish it as soon as possible. Even if you have the required emergency fund, add a month’s pay to it. The more money you have in your emergency fund, the more prepared you are to meet a financial emergency.
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Make a budget and stick to it: If you do not have a budget, make one and try to stick to it. If you already have a budget, see how your expenses panned out in 2019. Were there months in which you overshot your budget? If yes, try to identify those and understand the reasons why. If necessary, make suitable changes to your budget for 2020 based on expenses which have gone up or gone down. For this, the first step is to track your expenses so that you know how and where you are spending your hard earned money.
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Pay your bills on time: In case you struggle to pay your bills, make it a point to pay them as soon as you receive your salary, even before the due date arrives. Set up auto payments for all your bills so that you are never late in your bill payments. When it comes to credit card bills, pay it when you have cash at your disposal and do not keep it till the last moment. This will also improve your credit score over time.
List down your financial goals: The new year is a time to take a look again at your financial goals. Whether you want to save for retirement, buy a car, save up for down payment for a house, it is time to list down your goals. If you have them already listed down, review them and make any changes if necessary. Having your goals listed down is the first step towards achieving them.
Be more financial literate: Keep 15 minutes daily to improve your financial literacy. If you have already made a resolution to read a certain number of books in the new year, throw in a couple of personal finance books too. Otherwise, read web articles , newspapers and magazines to stay on top of financial planning news and articles. Remember, knowledge is power and it will help you make better financial decisions.
Get on top of your debt: Make a list of all the debt you have. If you are paying EMIs for a home loan, see if you can pay it off earlier. But first look at high cost debt like personal loans and credit card debt and pay it off with high priority. If your total EMI outgo is more than 40 percent of your take home pay, make it a point not to take any more loans, however lucrative the terms and conditions are.
