TomorrowMakers

This December, make some financial resolutions to have a financially healthy and happy new year.

A 2016 report from Nielsen shows that the percentage of working women in India who take their own financial decisions increased from 37% in 2013 to 52% in 2015. If you are one of these women, give yourself a pat on the back. But if you are not, it is imperative that you manage your finances on your own irrespective of whether you are working or a homemaker.

So, this new year, make a promise to yourself; either to start managing your finances on your own or to better educate yourself on personal finance so you can start making smarter decisions. Here are some financial resolutions that you can consider:

  • I’ll financially secure my health

You probably make a resolution to lose weight every year but what about securing your health? You never know when life will throw a curve in your way. Hence, you should be financially ready for health emergencies. A health insurance plan offers you the benefit of cashless and quality treatment so that you don’t lose out on maintaining your well-being because of lack of money.

Choose an individual health insurance plan that suits your medical needs. Go for the ones that cover women-specific ailments like cervical cancer, breast cancer etc. and maternity-related costs.

  • I’ll financially secure my life

It is a much researched and proven fact that women live longer than men. This makes it even more important for you to get your own life insurance plan irrespective of whether you are employed or a homemaker. And don't worry if you don't know how much sum assured you need. A life insurance calculator can help you decide this within just a few minutes. 

 

Many companies provide special benefits to women buying a life insurance plan – discounts until you turn 40, discounts on premiums etc. There are also specific insurance plans for homemakers which cover various conditions like the death of the spouse, disability, critical illness etc.

  • I’ll save for the long-term

In a desperate bid to save for a vacation, you might miss saving for your child’s education and regret it later. Hence, make separate investments for your long-term financial goals - buying a home, saving for your wedding or retirement. And don't get nervous if you don't know how to handle your money while investing. You can learn all you need to know about managing money as an investor by reading up or talking to advisors. 

Long-term saving and investments help your wealth grow over time. If you give your investments time, you would be surprised at the kind of returns you can get. 

Here's an example to understand this better. Let's say you put Rs. 1,00,000 into an investment instrument that offers 10% interest annually. After 5 years this amount will increase to Rs. 1,64,530. Keep this money invested for an additional 5 years, and the total will increase to Rs. 2,70,704. This is the power of compounding because your initial investment is reinvested along with the interest. 

  • I’ll pay off all my debt

Debt can be a huge financial burden and can weigh heavily on your savings. If you default on repayment, not only does it entail additional interest payments but also reduces your credit score.

Be disciplined and ensure that you pay off all the debts with a higher rate of interest including credit card debt, loans etc. This way you may be able to reduce this debt next year.

  • I’ll plan for my retirement

If you are young and decades away from retirement, you probably don’t give it a priority. You should know that your golden years would require a substantial corpus given the increasing rate of inflation. By the time you realise you need to save for your retirement, it’ll be too late and would cost you more. But you can prevent this from happening by using a simple retirement calculator, which can help you figure out how much money you will need to save if you want to live a comfortable retired life. 

The key to having a comfortable and worry-free retirement is to start planning and investing early. Today, you have a lot of options to save and invest for your retirement – National Pension Scheme, Unit Linked Insurance Plans (ULIPs), Senior Citizens’ Saving Scheme (SCSS), Post Office Monthly Income Scheme (POMIS) etc.

Conclusion:

Bringing in the new year is all about wishing, hoping and dreaming that you get the best of everything. But to realise these dreams and hopes, you need to ensure that you take your financial resolutions seriously and act on them.

Here’s wishing you a financially happy year!

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