As the year is coming to an end, you might be thinking of New Year resolutions. And you might have dusted off some of your favorites like lose weight, travel more, and eat healthily. But what about the resolution for your wealth’s health?
The beginning of the year is considered critical for financial to-dos. If you’re uncertain of what to focus on other than “spend less, save more”, let these 6 resolutions guide you to bring financial stability in 2021.
I Will Plan Specific Financial Goals
The first step to accomplishing something big in financial goals is to be specific like what you’re saving for and the precise amount you need. Then divide them into short-term and long-term financial goals to give them a realistic timeline. Short-term financial goals can be saving for a vacation or paying off a credit card debt. And long-term can be saving for retirement, buying a new home, or a child’s foreign education.
I Will Start My Emergency Fund
The New Year is a good time to start or grow an emergency fund. An emergency fund is simply a financial safety cover that protects you from unexpected events. Instead of relying on a bank for overdraft or a loan, you can start saving in a high-yielding savings bank account. The catch here is, the more you evaluate your spending and stick to your spending budget per month, the more you will be able to save the amount.
I Will Get Rid Of My Financial Debts
Clearing your credit card bills is easier said than done and carrying multiple credits, particularly at ranging interest rates, can feel like death. The experts suggest you consider debt consolidations like a line of credit, debt consolidation loan and move all or most of your debt in one place. Not only this will alleviate the trouble of handling numerous payments, but it can also reduce the carrying cost and even boost your credit score.
I Will Design a Budget Plan
We understand that it is burdensome to stick to those usual traditional budgeting methods. The alternative method that you can choose is working towards a spending scheme. As a general rule of thumb, you can divide your expense into a 50/30/20 spending ratio, in which 50% will be for a fixed utility such as rent, 30% will be for groceries and entertainment subscriptions and 20% will be for an emergency fund. You can choose to go for an app like Walnut. Or can follow a regular schedule like calculating your spending weekly/monthly.
I Will Increase My Financial Knowledge
If you want to grow this year and are serious about your financial goals, you should actively educate yourself regarding money, investment, and risks that you might face. Some ways you increase your knowledge can be like http://www.gulfportpharmacy.com listening to finance podcasts like ET Wealth Radio, subscribe to economic times, follow blogs around investing, saving, and budgeting, read books on investing, money management, etc.
I Will Invest Regularly & Review Periodically
The effective way to invest regularly is by investing in mutual funds through a Systematic Investment Plan. It will not only enforce a disciplined financial plan but also, will automate your investments. In addition to this, you should also make sure to review your portfolio bi-annually to cull out out-performing investments and optimize diversification. It will also benefit from balancing and will help you with better accomplishments.
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