8 Financial Resolutions for 2017

Once the party ends, the lights dim down, and the sun rises, most of us enter the New Year full of enthusiasm and a long list of New Year Resolutions. The most common ones include – hitting the gym regularly, eating healthy, travelling, spending more time with family, and many more. There is however, another set of resolutions which could greatly help you from a financial standpoint. These are Financial Resolutions and they’re as important and critical as any of the resolutions mentioned earlier.

If you aim to successfully achieve the rest of your resolutions, then you need to keep a check on your financials as well. One should have at least a few financial resolutions each year, and stick with them till you achieve the desired results. We’ve listed a few of these below, which could aid in improving your finances and making 2017 more fulfilling:

1. Assess your Financial Situation: Before deciding on any financial resolutions, it’s important to access your current financial situation, and see where you stand in terms of income and expenses. Will you be able to pay your rent and take care of other financial obligations throughout the year? How many of your expenses are unnecessary or avoidable? etc. Answering these basic questions will help you determine whether you need to economize or can live a more lavish lifestyle.

2. Clear Existing Debt: It’s always beneficial to pay your debts on time. If you don’t pay or keep delaying, then your interest costs will balloon and become unmanageable, thereby making a bad situation worse. Therefore, your first resolution should be to clear all existing debts. Start by paying your credit card dues; reduce the obligation on your car or home loan, etc. Proper savings can only commence once you’ve cleared your existing debts. To more about repaying your existing loans and improving your credit score, click here.

3. Set up an Automatic Savings Plan: Instead of waiting for the right time or moment to save, one should simply set up an automatic savings plan. There are a variety of such plans and instruments, which can help you, make regular periodic savings. These plans work by ensuring that a certain percentage of your monthly income is saved before you even spend the first rupee from your salary.

4. Start Investing: Investing is as important as savings. Savings help you in times of need, and investments aim to ensure that such times don’t arrive. It’s critical to grow your money, or else inflation will negatively impact your financial health. You could also take advantage of hybrid investment plans which combine savings and investments into a single multi-purpose plan.

5. Manage Your Credit Score: Having a good credit score indicates financial stability. Keeping a check on your credit score, helps in maintaining good credit-worthiness. Which in turn allows for quick and easy access to additional loans or funding; as and when you may require it.

6. Ask for a Raise: If you have been a hard worker and sincere at your work. Then it’s the right time to seek a salary increment. Talk to your employer, communicate the impact of your efforts, and ask for a raise. At times, it’s important to ask and openly communicate your concerns.

7. Create a New Income Stream: An alternate income stream is another way of saving and boosting your investment capabilities. In the long run, it’s always advantageous to have more than one income. This could be in multiple forms such as dividend, interest, rent or others.

8. Avoid Unnecessary expenses: This could be a little difficult to do, but is actually one of the most effective ways to increase or enhance your financial stability. Limiting or reducing avoidable or unnecessary expenses can help in quicker repayment of debts, faster buildup of savings, more money for investments, and in the long run facilitate big ticket purchases, etc.