As we step into 2024, it is time to reflect upon what you achieved in the previous year and set new goals for the New Year. Physical and mental wellbeing, travelling, reading and learning new skills are some common resolutions that people make; financial goals, though a crucial part of life, often take a backseat. However, making the right financial decisions could have a significant positive impact on every other aspect of your life.
The internet is brimming with information on how to make smart financial choices, which makes money management much easier than you think. You can learn about loans and credit cards on financial marketplaces like Paisabazaar.com. Similarly, you can register on investment platforms, insurance aggregators, budgeting tools, etc. to start in the right direction.
However, before you take help from third-party websites or apps, you must have clarity on the financial goals that you aim to achieve this year. Here are some financial resolutions to begin with.
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Pay Off Your Debt
One of the most common reasons why people struggle with finances is because they have unmanageable debt. If you are in a similar situation, the first of your financial resolutions should be to create a repayment strategy. If you have overdue balance on multiple credit cards, it would be better to take a personal loan, consolidate the debts into one single loan and pay off. You can also consider transferring your balances into a single card, if the credit limit allows. When you adopt a debt repayment strategy, it is important to put a hold on new expenses as well, so that the situation improves with time.
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Create a Practical Budget
Nobody knows your finances better than you do. Hence, instead of following an online budgeting tutorial, you should create your budget based on your income and priorities. Determine the categories of needs and wants of your family and make a budget that includes responsible spending as well as allows some room for leisure and enjoyment. Be mindful of extravagant spends, unnecessary spending and look for more cost-effective ways to fulfil your needs.
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Travel Smart
Whether you like to travel for leisure or your work requires you to travel often, there are multiple ways how you can save on this expenditure. You can get a travel credit card that offers generous value back, along with other benefits like complimentary lounge access, VIP access, airport meet and greet, etc. These complimentary services can make your travel both cheaper and convenient. Moreover, if you have airline, hotel or travel portal preferences, you can also choose co-branded credit cards.
You should also plan for your travels beforehand. Book your flight tickets in advance to avail lowered fare benefit. Research online and find economical lodging options that do not turn your budget upside down without compromising on a good vacation experience.
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Improve Financial Literacy
Financial literacy is all about learning the ropes of managing your money smartly, navigating hurdles with ease and building a secure future. You cannot become a financial expert overnight; it needs continuous efforts. You can start with following the right financial blogs or vlogs that guide you in different aspects of money. Several YouTube Vloggers and financial experts hold webinars and workshops for those who want to learn; you can attend one of those. Though a lot of content is available online, you must have the understanding that finance is a personal thing and it will be different for everyone.
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Learn Investment Strategies
Finances are more than just saving; you need to park your money in the right investment avenues to make it grow. You should not limit your investments to tax-saver FDs and other low-risk low-return instruments. When you are in the early stages of your career, you can take more risk so you must learn the right investment strategies. The goal here is to invest your money in financial instruments that can outpace inflation. Remember, generally, high-return investments would carry high risk and hence, you must be ready to take some risk to get the reward.
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Improve Your Credit Score
A good credit score reflects a responsible credit behaviour and it is the first thing that lenders check when you apply for a loan or credit card. Credit score is not built overnight; it takes several months of regular bill payments, good credit utilization ratio, and many more factors. Hence, even if you do not need a loan in near future, it is always a good practice to maintain an above average credit score, preferably 700 and above. It will be very helpful when you need financial assistance for reaching life goals like buying a house or a car or even for going on your dream vacation.
In addition to these, you should also plan and set aside a small amount every month towards your emergency funds. Ideally, you should have at least 6 months of your salary into the emergency fund stash.
Sometimes, you may be doing everything right but your finances may still be messy. In such cases, you should look for ways to earn more money. You can start a side hustle as per your skills and use the proceeds to pay your debts. Understand your finances, set priorities and make financial resolutions that are easy for you to achieve. Setting difficult goals might demotivate you, so you must start small and celebrate your wins, no matter how small they are.
