Personal Finance Resolution for 2019

The New Year is just around the corner and as the year ends, we all prepare for a fresh start. We must resolve to lead a healthier lifestyle, to adopt financial discipline, and invest to stay financially healthy.

Here are 10 New Year Resolutions Anjali Malhotra, from Aviva Life Insurance suggests one must follow to lead a healthy financial life:

Review your finances and define your personal goals
Take stock of your assets and liabilities, review your finances. Understand how money works. For instance, controlled credit card spending means lesser debt; less spending on unnecessary purchases (like impulsive buying) means more savings. Think about what you’d like to save for (children’s education, new home, car, a dream holiday, etc.) and consider how long you would need to save up to achievethat particular goal.

Start budgeting
2019 is just round the corner and now it’s the perfect time to prepare a budget for the coming year. But as it often happens, while you manage to successfully plan a budget, you fail to stick to it. Staying within the budget will not only ensure that your expenses are planned but also ensure you achieve your financial goals. Temptations lead to debts and problems in the cash flow. Keep you bank passbook updated. Find out your credit score to determine your financial status. Try improving upon it. Update your budget regularly.

Involve family while taking financial decisions
Teach your children about saving money andcutting down on unnecessary expenditure; educating them about these basic financial concepts will provide clarity on the family’s financial goals. Plan household budgets collectively, so that everyone may participate in saving and spending, and the responsibility is equally divided.

Start saving for your health
To ensure good health, you need to start planning early. Investing on a comprehensive health insurance plan like the Aviva Health Secure is a great way to do that. With the spiralling cost of medical treatment, a good health insurance comes in really handy during a medical emergency. Safeguarding the family against such financial crisis is good planning.

Start planning for your child’s future
As per a nation-wide survey, planning for children’s education is the topmost priority for most Indian parents. However, proper planning is still far away for most parents and thus they end up in debt while arranging money for the children’s higher education. By taking the benefit of services, parents will not only be able to recognise their child’s inherent talent but also be able to achieve their child’s dream with the education cost calculator that helps to calculate the expected cost of higher education and provides ways of investment to ensure availability of funds at the time of need.

Secure the future of your loved ones
Life insurance is fundamental to financial planning. Ensure you are optimally insured and that the financial future of your family is secured. Assess the amount that your family would require to retain the same standard of living in the absence of the earning member and plan accordingly.

Clear your debts
The biggest roadblock of your financial plans is debt. Pay your bills on time, clear all your outstanding debts. Credit card dues attract a high rate of interest and hence, it is better cleared on time. Try paying off your creditors in cash and save money on interest.

Start saving before investing
Before making investment plans, get into the habit of saving. Cut down on unnecessary expenditure. You can also open a separate savings account for this purpose and use it as your piggy bank,or invest in an insurance plan that returns double the premium on maturity because money saved is money earned.

Start saving for your retirement
You should start planning for your retirement by your late 20s. But if you haven’t done that as yet, you can start from the beginning of 2019. Saving for your retirement will help you ensure financial stability when you are beyond the reasonable age of working. Invest in retirement plans, that guarantees return on the maturity of the policy.

Build an emergency fund
A Contingency Reserve is the amount you should keep aside in your savings bank account and/or liquid funds for an emergency. Exigencies such as loss of job, medical emergencies, etc. can easily impact your personal finances.It is best to maintain a minimum 6-24 months of regular monthly expenses, including EMIs as a contingency reserve. This will enable you to be prepared and cover expenses during hard times.