New Year is almost here, and everyone is pumped to party hard and welcome the year in style. But before you swap the calendar, take some time to check out your current financial health, and make some financial resolutions for the coming year. This year-end review of your financial situation will help set you up for a more financially secure future.
If you want the next year to turn out to more lucrative than the previous one, consider the following financial tips or resolutions:
Cut Out Unnecessary Expenses
This is the perfect time to look back at your year-long expenses and cut out the unnecessary ones. Be honest with yourself and find out things like, if you are reading those weekly or monthly subscribed magazines regularly or the majority of them were left unread? How many times did you visit your gym after taking a year-long membership? Figure out if you are watching all the channels you have subscribed to on your set-top box or are you watching only selective favourite ones but still paying for all the premium channels? These seemingly small but unnecessary expenses are in reality the leaks that make you wonder where did your money go? Take time to find out all such year-long leaks and rectify them before entering the new year, so that they don’t play havoc with your finances this year.
- Kick The Habits That Cost You Most
Smoking, Drinking, Gambling etc. all these expensive vices are bad for your lifestyle, health and wealth. Just calculate how much money you spent on such costly habits in the entire year, the final total will surprise you and maybe it will also motivate you to kick out such unhealthy vices from your life to use that large sum of money more productively.
- Revisit Your Goals
Hopefully, you have achieved a few of your short term financial goals and would have made some good contributions to your long term goals which you set out in the starting of this year. Now, is the perfect time to revisit your goals and make the necessary changes, find out if they are realistic and will you be able to achieve them timely? If not try to tweak the amount or time of those goals to make them more practical, so that you can work to achieve them in the new year.
- Review Your Insurance Needs
You must re-evaluate all your insurance needs like Life Insurance, Health Insurance, Auto Insurance etc before the start of the new year or more importantly before the next premium due date. Make sure that you are not over or underinsured and not paying too much for your insurance cover.
- Update Your Beneficiary/Nominee Details
Have you gotten married or had a child during last year? Or maybe a loved one exited your life due to divorce or death? Life circumstances keep changing, therefore, it is important that you should recheck beneficiary/nominee portion of your insurance policies, bank accounts, mutual fund investments etc and make all the required changes accordingly.
- Check-In with Your Emergency Savings Account
A lot can change over the course of one year, your expenses could have undergone major changes, or perhaps your job security level changed during last year. Any change in your previous financial situation will help you find out if your emergency fund is still adequate or do you have to make any changes. Better yet recalculate the amount of emergency fund required based on your current position, you can make use of “Emergency Fund Calculator” available on this website as well for this purpose.
Following the above-mentioned tips and, making sure that you have a proper budget in place so you don’t spend your hard-earned money on impulse purchases, will help you kick start your new year on a healthy financial note.
Happy New Year!