New Year always brings lots of optimism and opportunities and there are a large number of people who consider this time of the year to be the ideal one to make resolutions about their personal life. And when it comes to your personal life you just simply can’t but think about your personal finance since this is one of the most important aspects of your life. What happens most of the times is people fail to maintain those resolutions as they make them unnecessarily complicated and really hard-to-maintain. Therefore, it is important to set goals that you can actually achieve, and not something, about which it is easier to dream about only! But even before you go on making such resolutions, you must review your current financial status. Here are some common resolutions that every individual must follow, irrespective of their expenses and income –
- Pay off all your debt – In case if you are trapped in a vicious cycle of debt, it is most likely that you have already started to pay off those. But if it is only last year when you had to take a credit card loan and some other payday loans, you might not have started to pay off those. So, start this New Year with the agenda in your mind that you will pay off all your debts as soon as possible. Budgeting and paying of all your debts might not be that much difficult as it generally appears, and what you need to do is to make a smart planning. Consider paying off the debts with the highest interest rates at the start. If you have got some extra cash in your hand, consider making pre payments instead of paying installments.
- Review your investment portfolio thoroughly – Reviewing all your investment plans at the very beginning of the year is really a wise decision. Make sure you ask some basic questions to your financial advisor like whether you are exposed to any sort of risks, if any adjustments are required in any of the portfolio etc. For instance, if you have started working recently and are single, then you can easily invest in a riskier portfolio compared to those who are married and have liabilities about their families. Make sure you always maintain a balance between the emergency requirements and the long term goals while reviewing your personal investment portfolio.
- Invest in your emergency fund – If you have already not planned an emergency fund, this is the high time to do the same. In the present economic situation, sudden job loss is a very common instance; or what if one of your family members suddenly falls ill! You should always be financially prepared for such emergencies and this is where your contingency fund will help you most. Make sure this fund always contains enough money that can sustain the dependant members of the family for at least a period of six months. Make sure you build regular investments in your emergency fund in order to earn handsome returns.