Financial Resolutions for the New Year 2019

The New Year is just a couple of weeks away and it’s time for your New Year Resolution. Why not a special resolution to be financially aware? Financial awareness is not just financial literacy or the basic ability to understand and manage money. It’s matching financial literacy with financial goals and needs.

Understanding financial products and choosing the ones which meet financial goals, understanding the financial assets owned to grow money, making a budget to manage your money and familiarizing yourself with simple tasks like operating your bank accounts and understanding the benefits of digital payments like credit cards, mobile wallets, internet and mobile banking, makes you financially aware. Financial literacy alone is not enough. You need a holistic financial education to be financial aware.

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"A Resolution Towards A Financially Aware New Year".

Let’s glance through a few tips which can make you financially aware. The first tip of financial awareness:

1. Get to know your personal finances: This is simple. Look at what you earn and how much you spend. Find out where your money gets wasted. Make a budget and track every rupee earned and spent. When you start tracking your money, you will be shocked to see how much is wasted.
2. Cut down unnecessary expenses: If you want to stop the money wastage, spend on needs and not wants. Understand why you spend so much and if you still can’t control spending, leave your credit card at home. Never use peer pressure or mood swings as an excuse to spend money. It’s best to postpone a purchase by a month. After a month has gone by, if you still feel there’s need for that item, go ahead and make the purchase.
3. Get rid of debts: Getting rid of debt is a big financial resolution. Create an emergency fund with at least 3-6 months of living expenses. You won’t need a personal loan or that credit card in a financial emergency. Being financially aware helps distinguish between good loans and bad loans. Availing a home loan gets a dream home at a young age. The tax benefits make this a good loan. Education loan gives a bright career and car loan, a car you badly need. Personal loans and credit cards charge high interest and lead you to the debt trap. If you are struggling with debt, an important New Year Resolution would be getting out of the debt trap.
4. Make your family financially aware: Being financially aware is not enough. This New Year, take the resolution to make your family financially aware. What use is saving and investing, if your family wastes all the money? Teach kids to spend less and save more. They must learn compound interest which is interest on interest. While a fixed deposit earns interest on interest, a loan charges interest on interest. Availing unnecessary loans is the sure way of falling into a debt trap.

Get your family involved in the household budget. Bring family level accounting vis-a-vis finances, to make sure each family member knows his responsibilities. This New Year Financial Resolution can be a stronger goal than the one set just for yourself.

Building wealth is like a pyramid. It requires a solid base of saving and investing. You got to start sometime. Why not make a resolution this New Year to be financially aware and build the Pyramid of wealth?

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