The New Year is almost here. Every year, come December 31, we suddenly decide to transform our life and believe with all our resolve that this year, we will become the best possible version of ourselves. And as we plan for New Year Resolutions that can help us begin New Year 2023 with a positive attitude, it is always important to address the elephant in the room — our financial responsibilities. From the sheer complexity of technicalities to the presumed boredom that the financial world is believed to have, there are various reasons that financial resolutions are the last or nowhere on our New Year resolutions list. Well, it is high time we simplified finance and took responsibility for our finances and what better time to do it than in 2023? Here are the top 5 Financial resolutions you need to make in New Year 2023! New Year Resolution 2023 Ideas: From 5-Minute Journaling to Time Off Screens, 5 Mindful Resolutions for a Happy and Enjoyable New Year.
We have all heard that saving x percentage of your income is essential. We have all tried to create these savings, and we have all ended up using them for one reason or another. But what we are suggesting here is slightly different. Emergency funds are very different from your typical savings. Well, because you use it only in the case of an emergency (and no, needing a new outfit or having to upgrade your travel plans for a friend’s trip is not an emergency). Set aside a small dedicated amount from your monthly income as an emergency fund, which will only be used for real-life emergencies like medical bills, unemployment, etc. List of Long Weekends in 2023 in India: Get New Year Calendar With Holiday Dates To Make the Most of Your Vacations.
PS – Having a separate account, which is not easily accessible (no saved debit or credit cards), can help you actually to create viable savings or emergency funds. Setting aside the money in your salary account may often lead to overspending. Out of sight, out of mind can really come to your benefit here!
Charity is a Financial Habit
Charity is often seen as something we expect the rich to do but ignore as individuals. As we enter 2023, we need to realise that charity is not just for a specific part of society, and more importantly, it is not an act but should be a financial habit. Setting aside a small part of your income as charity can help you not just become more socially responsible but can also help you save taxes while doing some good. Identify charities that offer tax benefits (a quick google search will give you the best options) and indulge in charity to welcome New Year 2023!
While most people will vow never to shop again after overspending during sale season, the more sustainable approach will be to budget. Just as you set aside a budget for your monthly groceries, have a shopping and entertainment budget, which will help you to plan your purchases and avoid unwanted and unplanned splurges (which often lead to dire financial situations.)
To take the previous point further, knowing where your money is going is the best way to have a clear hold of your finances. Assigning specific funds for everything from groceries to movie nights to online subscriptions will help you with this. Once you know how much you can/should spend, you can cut down on the areas where you tend to overspend and have much stronger control over your finances. And if doing this on excel seems overwhelming, there are various financial journals as well as apps that can help you with this in just a few clicks!
Revisit Your Investments
Finally, we may forget the investments we once made, thanks to ECS mandates that ensure that our payments are due on time. But more often than not, it is crucial to understand how your money is doing. You can use any of the long lists of apps to feed in all your investments and have a single source to understand how your money is doing. And it is then that you can ask the most important question — is it enough for now? Let’s face it, the Rs 50 lakhs insurance cover you took as a 24-year-old may not suffice for the 32-year-old you who has a home loan of Rs 75 lakhs. Check your investments and if need be, feel free to seek an investment advisor’s help to ensure you are on the right track!
(The above story first appeared on LatestLY on Dec 29, 2022 12:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).