While you bid adieu to 2015 and ring in the New Year, you also gear up for new hopes, aspirations and worries. No matter how hard the path you choose or how long the journey, you can achieve your goals if you have clear resolutions in your mind and the will to see them through, come what may. For starters, building a sound financial future should be one of your top priorities of 2016. To the end, there are several simple rules to follow as listed below:
Budget wisely
Do not succumb to the temptation of overusing your credit card, acquiring new personal loan or making extravagant purchases. There is a deluge of high-end products and services in the market across various segments from kitchenware and consumer goods to gadgets and home appliances. Choose what’s needed and discard the rest. In short, do not be a hoarder. Make smart purchases and resist indulging in retail therapy. Else, you will find yourself caught in a vicious cycle of debts.
Determine your ‘savings ratio’
You would do well to draw up a detailed chart with details of your monthly expenditure and savings. You must clearly determine your savings ratio. You should ensure that you save at least 20 to 30% of your monthly income without fail. Make ‘goal-based’ savings your first priority. If you chalk out a detailed strategy to save a certain percentage of your monthly income, you will eventually build a corpus. Akin to EMIs debited automatically from your account every month, you should maintain a ‘savings ratio’ as well.
Plug into the insurance lifeline
You can seek the services of a financial consultant to ascertain the right mix of health and life insurance policies you require. You can opt for various types of plans including a pure term plan. According to experts, your life insurance plan should ideally cover expenses related to specific goals and outstanding liabilities. Despite heavy promotions, Indians continue to be under-insured. In several cases, employees depend on the health insurance coverage provided by their companies which may or may not fulfill their requirements.
Avoid random investments
Smart investing does not mean piling up a bunch of insurance policies and mutual funds. You must have a clear picture of your finances. You should, therefore, analyze your insurance policies, personal loans and savings plans on a regular basis to ensure that you are not overstretching yourself. If you do not figure out where your money is, you will not only lose track of your savings and investment ratio but also incur losses in the long term. Resolve to purge the worthless investments from your portfolio. Do not put money into non-performing investments at any cost. Go through the ‘catharsis’ and purge poor performing investments.
Plan for retirement
You are not getting any younger, no matter what your loved ones may lead you to believe. If you do not want to get bogged down by inflation and urban lifestyles, you should plan to build a significant corpus to keep up with daily expenses in your retirement years. You can neglect it at your own peril. Your savings and investment plans must be geared to ensure a stress-free retired life for you. You deserve to lead a relaxed, graceful life after you are out of the rat race.
Knowledge is power
There is no dearth of information on various top financial products in the market. You should aim to be a smart and discerning investor. Educate yourself as much as you can to understand the various products and services on offer. You will then not only make a better choice most suitable for your requirements but also avoid getting into bad investments.
- Budget wisely
- Determine ‘savings ratio’
- Plug into insurance lifeline
- Discard non-performing investments
- Plan for retirement
- Knowledge is power
Budget wisely
Do not succumb to the temptation of overusing your credit card, acquiring new personal loan or making extravagant purchases. There is a deluge of high-end products and services in the market across various segments from kitchenware and consumer goods to gadgets and home appliances. Choose what’s needed and discard the rest. In short, do not be a hoarder. Make smart purchases and resist indulging in retail therapy. Else, you will find yourself caught in a vicious cycle of debts.
Determine your ‘savings ratio’
You would do well to draw up a detailed chart with details of your monthly expenditure and savings. You must clearly determine your savings ratio. You should ensure that you save at least 20 to 30% of your monthly income without fail. Make ‘goal-based’ savings your first priority. If you chalk out a detailed strategy to save a certain percentage of your monthly income, you will eventually build a corpus. Akin to EMIs debited automatically from your account every month, you should maintain a ‘savings ratio’ as well.
Plug into the insurance lifeline
You can seek the services of a financial consultant to ascertain the right mix of health and life insurance policies you require. You can opt for various types of plans including a pure term plan. According to experts, your life insurance plan should ideally cover expenses related to specific goals and outstanding liabilities. Despite heavy promotions, Indians continue to be under-insured. In several cases, employees depend on the health insurance coverage provided by their companies which may or may not fulfill their requirements.
Avoid random investments
Smart investing does not mean piling up a bunch of insurance policies and mutual funds. You must have a clear picture of your finances. You should, therefore, analyze your insurance policies, personal loans and savings plans on a regular basis to ensure that you are not overstretching yourself. If you do not figure out where your money is, you will not only lose track of your savings and investment ratio but also incur losses in the long term. Resolve to purge the worthless investments from your portfolio. Do not put money into non-performing investments at any cost. Go through the ‘catharsis’ and purge poor performing investments.
Plan for retirement
You are not getting any younger, no matter what your loved ones may lead you to believe. If you do not want to get bogged down by inflation and urban lifestyles, you should plan to build a significant corpus to keep up with daily expenses in your retirement years. You can neglect it at your own peril. Your savings and investment plans must be geared to ensure a stress-free retired life for you. You deserve to lead a relaxed, graceful life after you are out of the rat race.
Knowledge is power
There is no dearth of information on various top financial products in the market. You should aim to be a smart and discerning investor. Educate yourself as much as you can to understand the various products and services on offer. You will then not only make a better choice most suitable for your requirements but also avoid getting into bad investments.