Expert advice

Jan 09, 2015,16.23 IST

Five new year resolutions with a twist

Lovaii Navlakhi

This new year we did quite a few things differently- we took short family vacations instead of a long one. I also decided that I will pen down resolutions only once I am in a few days in 2015 as the steam mostly runs out fast on the resolutions.

So, my recommendations on financial resolutions for 2015 are here with a twist:

1. I won’t save more, I’ll save first: So, this year don’t intend to save more, intend to save first. Is there a difference you ask? Well, yes! And a big one at that. If you save first, you don’t see that money in your bank, if you don’t see that money in the bank, you don’t spend it. When we aim to save more, we find it overwhelming and hence may not meet that goal we set ourselves and it fades away as time passes. But, if you save first- you can actually set up a mechanism where it automatically transfers a particular amount every month to an investment and before you know it Voila! You’ve met your goal.

Try it! For eg: You can set up an SIP in a liquid fund which will mean you invest first every time you get your salary in your account.

2. I will take risks, but I will protect them first: This year if you intend to take risks, by all means do. But don’t take risks when it comes to protecting your family. Insure yourself and insure adequately- adequately being the key here. Because if you don’t insure enough, it is almost useless. So, calculate your family’s expenses and their future goals and take insurance accordingly. Take the help of an advisor you trust, but do ask the right questions. Remember term insurance is the cheapest form of insurance.

3. I may not eat healthy, but I will take health insurance first: Eating healthy and exercising right are among the top resolutions every year. Healthcare costs are through the roof. You will know if you’ve visited a doctor in the last 12 months or even had some tests done. It is best to protect yourself against future illnesses/ happenings because these costs are only going to go up. Healthcare inflation is much higher than the regular inflation numbers quoted.  

4. I will spend; but I will plan my spending: By all means spend, you need to! You need to spend money for basic essentials, for regular expenses and also because we earn so that we can enjoy our money. Do spend, but if you can plan your expenses, you will see a lot of difference in how you manage your money and also how you save more when you plan your expenses.

5. I will be impulsive, but I will set up a fund for it: Set up a fund for having fun! It can be your “Impulsive fund” so that you know that despite being financially savvy you have time and flexibility to act on impulse too! But you also know there is a limited fund and you cannot splurge all you have!

We all need that freedom. Here’s an idea that allows you to save more and spend on impulse too. Win- Win right?  

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