2017 is here! I hope 2016 was great for you and 2017 ends up being even better. It is the dawn of a new era and as is tradition, it is time to begin the new year with resolutions.
Often, the problem with New Year Resolutions is that they are easy to procrastinate. There’s an entire year ahead to fulfill them, after all. Most of us start out enthusiastically, but our enthusiasm towards the resolutions wanes as January turns into February and March and the year keeps trickling on.
This is why, I decided to bring to you money resolutions that you can take and implement in January itself. These are actionable resolutions that will help you improve your personal finances right away. And since taking care of your personal finances should be an ongoing affair, I have also elaborated on how you can keep reaping the benefits of these resolutions all through the year as well.
So, without further ado, let’s go right to the money resolutions that you can fulfill today.
Buy insurance online
This may seem obvious, but a lot of people in their 20s and 30s don’t have insurance–life or health. Traditional financial wisdom says you should buy insurance even before you begin investing. Insurance can stop your finances from derailing due to unexpected circumstances. What’s more, insurance premiums get costlier the older you get. Hence, the sooner you buy insurance, the better off you will be in the long run.
To do: Head to a portal like PolicyBazaar.com or CoverFox.com where you can easily compare different insurance products and purchase a policy that fits your needs. Insurance bought online is much cheaper. Check the insurer’s claim settlement ratio and compare the premium with other policies before you make the final decision.
Next steps: Claim income tax benefits at the time of filing returns on the insurance premiums you pay. Life insurance premiums are tax deductible up to ₹1.5 lakh under Section 80C and health insurance premiums up to ₹25,000 under Section 80D.
Book that summer holiday
Most people with families head out on a vacation during the summer or Diwali holidays. Most of these vacations are planned at the last minute in a rush. So obviously, you end up spending a lot and probably even compromise on the bookings you end up making. And that is if you’re lucky. Most of the times you will have to dump the idea of going on a vacation because everything good is either booked or too expensive to consider.
To do: Sit down with your family and pick a place you want to visit. Check out the calendar to figure out the holidays you would have and make the bookings right away. Flights are usually cheaper when you book in advance and you will be able to get the hotels of your choice as well.
Next steps: Depending on where you’re going, you will need money to spend on the vacation. Plan for that from now itself by setting aside a little money every month. This way you’ll have the money to spend without having to dig into a single month’s savings.
Delete shopping apps
How often have you found yourself surfing through shopping apps on your phone out of sheer boredom? Quite often, right? And invariably, you will like something that you don’t really need. So you go ahead and splurge on it. That’s fine as long as this happens once in awhile. But in reality, we end up spending a lot of money on purchases that we don’t really need.
To do: Delete the shopping apps from your phone. When you need to buy something, you can log-in from a computer. Even if you don’t want to delete the apps, you can at least remove the saved cards from the apps. Having to enter in your card details will make you think twice about whether you really need to make that purchase or not.
Next steps: Make a note of the things you need to buy and if you can, wait till the discount and sales seasons. Offline as well as online vendors periodically have sales that you can take advantage of to get things cheaper.
Open a new bank account for emergency funds
Having an emergency fund for exigencies is a sound financial decision. This is the amount you have set aside for unexpected occurrences like medical emergencies, loss of job, natural disasters,etc. But when this money is kept in the bank account you use on a regular basis, you run the risk of using it for anything other than an emergency. If it is easily and readily accessible, it invariably gets spent.
To do: Open a new savings bank account and park the emergency money there. Make sure this account is not linked to any of your regular spendings. Don’t carry the account’s debit card with you either; leave it in a drawer at home and take it out only in case of an emergency.
Next steps: As your income increases or a member is added to your family, top up the emergency fund. Once or twice a year, you can even make a small transaction from the account to ensure it doesn’t become dormant.
Stop automating bill payments
Giving your credit card a mandate to pay your card, phone and utility bills automatically every month is convenient. But automating payments can mean you are not able to keep a tab on how much of your money is getting spent on these items. Credit card bills typically have different kinds of charges and interests as well, which people end up paying without being aware of.
To do: Pay the bills by yourself every month. It will take up a bit of your time but you will be able to figure out if you’re spending more than you need to on any of the items. This will help you keep your monthly budgets in check and control expenses. Your phone bill, for example, might have services that you don’t actually use.
Next steps: Keep a track of your bills and see if your spends increase in any particular month. Paying the bills yourself will also allow you to immediately notice a wrongful charge and have it reverted as soon as possible.
Learn to cook
If you think cooking doesn’t have anything to do with money, just go through the long list of taxes and charges that make up your restaurant bills. It is estimated that we pay around 30% over the cost of the food we order when we eat out. The various taxes and charges often outnumber the items we order. This makes eating out not only unhealthy but expensive as well.
To do: Learn how to cook so that you eat out less. You can begin with the basic types of dishes that are easy to prepare. The next time you feel the urge to eat out or order in from outside, just head over to the kitchen and cook something that will be easy on your stomach as well as wallet.
Next steps: As you get better at cooking, you can turn it into a hobby and start experimenting with different kinds of dishes. This will make a big difference to your savings as well as health,
Happy new year. 🙂