Top 5 FinancialResolutions for New Year 2020
Setting up realistic and measurable goals for your financesis the first step towards achieving them. Here are 5-financial tips that canhelp you start 2020 on the right note
Save More for Biggerdreams
If you want to start your new year in the right directionthen the first step you must take is to save for your bigger dreams. Savingsfor bigger dreams can be anything ranging from saving money for pursuing acourse, international vacation, starting a retirement account or saving for ahome down payment. Whatever it is, you must know exactly why you are savingfor.
Once you know your dreams and how much money you need tofulfil it, you can proceed with your savings plan. If you want to hit a biggertarget then divide the money you need by the time you have at hand. Forexample, if you need Rs. 10 Lakhs for you home-down payment then first dividethe amount you need to save each year.
Next, you need a recurring deposit account to start savingthe money. A recurringdeposit account allows you to grow your money through compounding andgives your goal an extra boost. Since it comes with a lock-in period, youcannot spend it even if you feel tempted. Thus you can save money regularly togive your goal the required momentum.
Focus on the overallinvestment mix: review your asset allocation i.e. the overall mix ofstocks, bonds and cash in your portfolio. Make sure your investment portfoliois in sync with your long-term goals, risk-bearing capacity and time frame.
Diversificationacross various asset classes: diversification will allow you to reduce therisk factor while helping you to reach your goals. Consider other investmentstypes like mutual funds or ETFs if they align with your goals.
Consider the amountof taxes you pay: you may shift to a tax-efficientinvestment if you are paying a good amount of your interest income astaxes. Some of the investment options that come with great tax benefits areretirement planning accounts, municipal bonds and ETFs.
Switch towardsAutomation:
One of the best financial resolutions for individuals whoforget their bills on time is automating their savings or salary account.Through automation, you permit your bank account to make your monthly paymentson a specified date to the insurer or a loan account. Automating your accountwill help you pay your credit card bills and loan EMIs on time thus saving youfrom negatively impacting your credit score. If you have previously missed yourinsurance payment then automating your account can save you from missing yourpayments.
Stick to the above 4Financial Resolutions:
Once you have an investment plan in place, make sure youfollow it. Revisit your plan every month and check your progress. Revising yourplan will allow you to remain focused and you can achieve your goals easilyover time.
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