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Financial Resolutions To Swear By Next Year

Financial Resolutions To Swear By Next Year

It’s that time of the year when everyone can press the rewind button on their life and start afresh – from relationships, diet plans, career goals to financial affairs. New Years is a reminder to everyone that it’s okay to make mistakes and everyone gets another chance at rectifying them. To get closer at achieving financial independence Miss Manage has listed 4 financial resolutions to swear by in 2019.

#1. Don’t get intimidated by finance, learn about it    

Just because someone else has been managing your money for you doesn’t mean you can be ignorant about it your entire life. It’s intimidating, we get that. But it’s important, more important than endlessly scrolling on your Instagram feed!  So make it your resolution to read at least one Personal Finance book throughout the year. And if you’re a millennial who prefers your content digitally then ditch some of those meme pages, follow few personal finance websites, blogs, facebook pages, groups and sign up for their newsletters instead! In addition to reading, join and attend financial workshops to strengthen that knowledge. Once you’re confident about the basics you can move on to the next step of financial freedom – Speaking to others about it.

#2. Have that impending conversation with those who manage your money

Umm…money talks can get AWKWARD. Especially if that means talking to the person who has been managing your money for you all your life (which in most likelihood would either be your husband or your father, yikes!). Don’t worry it’s like ripping that Band-Aid from your wound, slightly painful but totally needed.

If you know what you’re talking about (which will only happen once you read & learn more about finance, refer to resolution #1) having the conversation will be a lot easier. Since a lot of money related matters are largely dependent on power and expertise, if someone thinks you’re incapable of managing it yourself it is easier for them to take control. But if you’ve got your basics right, you’ve proved that you can handle your money and you can budget well, they’ll have confidence in you. They’ll trust you and it will be easier for them to hand over the reins to you.

Of course, this won’t happen overnight and it will take some time so be patient. During the process, it’s okay to seek help. And if you don’t know where to begin you can start by asking some basic questions to your husband/father as Monika Halan has suggested in this interview. This will give you a fair idea of your financial standing. So what are you waiting for? Go have that conversation ASAP, don’t procrastinate!

#3. Get your records in place

Now since that rather uncomfortable conversation (refer to resolution #2) is out of the way, it’s time to take some responsibility and prove that you’re capable of managing your money.  For those who’re already investing or someone’s investing on your behalf, this year take stock of all of those investments.

Once you’ve got these records in place the next step is to update them. Small things like assigning a nominee for your bank account, investments and insurance policy to updating your address and contact details on them is pretty crucial in bringing your financial life to order. So make time to do this anytime during the year and organize it all in one place. Trust me this can be an extremely satisfying and rewarding experience.

Pro Tip – Since this might be tougher than you’d imagine, do it together with someone you trust (your friend, husband, father, sibling). Seek their help and ask them to keep you on track.

#4. Be SMART about your financial resolutions

We all know when it comes to managing our money, sticking to a monthly budget is pretty much the rule of thumb. Year after year we keep making financial resolutions to make this happen. But that sudden middle of the year vacation we decided to take or those weekend brunches that we couldn’t resist, end up putting a MAJOR dent in our plans.

So this year don’t just make financial resolutions that you’ll follow for the first few months and forget as the year is about to end.  Be SMART (specific, measurable, attainable, relevant and time-bound) about them. For instance as per this Washington Post, instead of just saying

“I want to reduce my debts”

Lastly don’t just say I want to reduce debt this year, this year make sure you pay off any impending debts if you can even before you think of investing. Create a timeline by when you’ll be debt free and stick to it. Don’t be late on any loan or credit card due dates and account for these expenses in your budget.

“I’ll spend less this year.”

Instead, track your monthly expenses and pen down everything you spend on – right from necessary expenses such as bills to discretionary expenses such as eating out. From these entries see where you’re spending a lot and how much of it can be cut down. You don’t need to cut down all discretionary expenses because you’ve earned them but you can cut down on a few just enough to meet your savings goal every month.

If you find this difficult to follow use the envelope system – whereby you have separate envelopes for separate spending categories such as food, groceries, bills, entertainment, shopping etc.  When you get your paycheck based on your budget for each category allocate money in each envelope and don’t spend anything more than that. This way you’ll be disciplined with your spending every month and won’t overspend on a particular category.

“I’m going to save more money.”

Set a target. Say that you’ll save at least 5%-10% of your income till you build an emergency corpus of at least Rs.50, 000. Ideally, an emergency fund should be 3-6 months of your expenses. So if your monthly expenses are Rs.50,000 your emergency fund would be between Rs.1,50,000- 30,0,000. That’s a huge amount! You might not be able to achieve it at the first go. So start by saving small amounts every month to reach a smaller goal (in this case Rs.50,000) and if you manage to reach that easily then start saving more every month to reach a higher goal.

So let’s click RESTART by being financially SMART in 2019. If you’ve got any other financial goals share them with us and we’ll include them on this list!

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Talkative, clumsy, punny, intuitive are just a few buzzes of this queen bee. An aspiring business journalist looking to find her throne in the corporate world.

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