The wait is finally over and it is 2021. The year brings with it a new dawn to our lives after what has been a very uncertain, challenging year. New hopes, new beginnings and new opportunities beckon us this year. The past year taught us many valuable lessons and this is why this new year is different. We start stronger, with greater wisdom and more importantly, with a new perspective and value for the things that truly matter.The year 2020 made us all rethink our lifestyle and question our financial behavior. Never was our financial situation evaluated and understood as closely as we did in the recent past. The year 2021 brings an opportunity to start afresh, to practice good habits and follow the financial behavior we all want to. What better way to do that than by having financial resolutions set for the new year. Mentioned below are SEVEN FINANCIAL RESOLUTIONS.
1. I WILL SAVE MORE THAN EVER
A lot of people are today saving more, except for those who have been adversely impacted by the pandemic. Those who have managed to continue with their employment and business are the lucky ones. This is a lesson hard learned. No doubt, in the new year, the first resolution would be to save more, as much as possible. The minimum recommended target savings would be 30% of your net cash income. The first thing you should do is to restart all the mutual fund SIPs you may have closed /stopped last year, if any. Increase your SIP savings meaningfully as soon as possible and while starting a new SIP, chose the option for ‘Top-Up’ SIP which will automatically increase your SIP savings going forward.
2. I WILL WRITE OFF ALL DEBT THIS YEAR
3. I SHALL PRACTICE FINANCIAL DISCIPLINE
4. I WILL STRENGTHEN MY AND MY FAMILY’S SHIELD AGAINST FINANCIAL UNCERTAINTY
The greatly pandemic helped raise the awareness levels of insurance and its criticality in our lives. Needless to say, adequate life insurance is very crucial. Do not fall for policies giving you up to 10 times insurance cover. They are all expensive investment products in the garb of insurance. The focus should only be on the ‘sum assured’ amount whenever you buy an insurance policy. Hence, experts recommend term plans where the likely premium of an Rs.1 crore policy for a 30-year-old may well be below Rs.10,000. Further, many of us are still stuck with old health insurance policies where we haven’t increased the cover for many years. Go for minimum health insurance coverage of Rs.10 lakhs and ensure coverage for all family members. The cost may be on the higher side for old parents, but that’s where the claim probability is also high. Always look at your insurance premium as a 10-year investment which will bear fruits even if there is a single emergency in future.
5. I WILL GET MY RECORDS UPDATED AND SHARE DETAILS
Do you know, post your death what will happen to your bank accounts, investments, who will get the insurance amount? If you have not filled up a simple nomination form, your family will be running from pillar to post to get the paperwork completed just to prove that they are your legal heirs. To avoid all the hassles, just ensure that all your bank accounts, investments, bank deposits, insurance etc have proper nomination done. Also document everything in one place with relevant details and contact persons. Imagine the of such a document in case of an emergency!
6. I WILL GET MY WILL DOCUMENT PREPARED!
We all understand the importance of a Will document. In the absence of this, all your ‘estate’ will be distributed as per law and not as per your wishes. Further, the family will also be saved from a lot of paperwork and legal hassles in your absence. Even a simple Will written on plain paper is a valid document, even though a proper registered Will document is always recommended. To begin with, just take a plain paper, write down details of all your assets and liabilities and how you want it distributed amongst your dependents /relatives. Share this with your spouse/parents or any other trusted family member /friend or lawyer. Always remember that a WILL is not something which we make only when we grow old. If you have life insurance, why not have a Will? Both are two sides of the same coin.
7. I WILL VALUE AND RESPECT WHAT MATTERS THE MOST
2020 made us realise what is important in life. Good health, having loved ones by your side, creating and sharing memories, is what matters the most. Your financial well-being can of course sweeten a lot of things, but still, it can do only as much as to remove challenges and hurdles in life. Inner satisfaction, peace, happiness and love cannot be bought. This new year, resolve to change things a bit and have more time and energy for things that really matter. If you have dreamt of or to do doing something, now is the best time to start. Just do it. Let us not wait for another year to pass by.