The New Year is just around the corner. It is a time to celebrate all the great things in the year while planning some goals for oneself for the upcoming year. While this year might not have gone the way most people planned it to be, it did give us some time to rethink multiple aspects of our lives, one of the most important one being our financial health. The pandemic induced job losses and negative market sentiment took a toll on many people’s lives, reminding us of the importance of money management and financial planning.
Let us look at five financial tips that you can take on before the new year with the worst behind us.
- Get Rid of Debt - Before the next year begins, take a pledge to pay back all your debt as soon as possible. Take a look at all your debts and identify the most expensive ones (higher interest rates). Make a plan to pay them all one by one and set time-bound goals for yourself. Make sure you set reasonable goals. No matter how small the amount is that you can afford to pay back at the moment, do not delay.
Also read: 5 Ways to Improve Your Financial Habits - Pay Yourself First - ‘A part of what you earn is yours to keep’ make this quote from ‘The Richest Man in Babylon’ the foundation of how you save. Make it a point to save at least 10% of your monthly income as soon as you receive it. This is the only way to stay ahead of the curve and grow your wealth. If you keep spending everything you earn, you might enjoy a lavish lifestyle for the time being, but it will be temporary. Your financial health will also not increase.
- Stick to a Budget - No incredible feat can be accomplished without a plan. An account is a financial plan that you create to achieve your financial goals—pre-plan how much you wish to save each month. Decide how much you want to spend on needs and how much you want to spend on wants, and then make sure you stick to that amount. This type of financial planning will increase your financial health massively.
Also read: 5 Spending Habits You Need to Break Right Now - Account for Risk - Financial planning involves many components that aim to reduce financial trouble and ensure financial stability. Make sure you have an emergency fund that has enough money to take care of 6 months of your living expenses at least. This fund is like a job loss or accident; it should not be used for any other purposes like a vacation. Make sure you have the necessary insurances. Having life insurance and health insurance is a must, especially if you are the family’s sole bread earner.
- Save for the Future - Always plan. When it comes to financial planning, ignorance is not bliss. Understand your financial needs for the future and save for them beforehand accordingly.
And remember,
The better your financial habits, the more will be your Financial Wellness score on the Wizely app and the more rewards you are likely to earn every day with a chance to earn a mega bounty of up to Rs 25 lakhs every Wednesday!
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