Financial resolutions made during beginning of the New Year can determine the shape of your short and long term financial objectives.
There is a famous saying that ‘Resolutions are meant to be broken’. But, there are certain resolutions like financial ones, which should never be broken and followed till achieved. Financial resolutions made during beginning of the New Year can determine the shape of your short and long term financial objectives. You should carefully select each resolution and make an effective plan to accomplish the targets. For millennials, financial resolutions would not only help them in keeping their finances healthy, but would place them in a better position to take higher responsibilities.
Let’s take a look at 5 important resolutions that millennial should consider this year to build a strong platform for short and long term growth.
Everybody knows that saving more and spending less can help you build a bigger corpus in the long run, but a very few practice it. You should make a resolution to save more this year by using smart steps. You can save more money every month by chalking out a budget and spending according to that. It’ll help you to reduce unnecessary expenses. Your focus should be to save money first and then spend from the amount left in your hand. The saved money can be put in a liquid investment product to ensure a good return and build a contingency fund.
Use Digital Transactions Only
Be digital, go paperless should be your mantra this new year for everything. Financial transactions using the digital mode can help you save time and keep you hassle free from managing papers. It will also keep your records safe digitally and can fetch you discounts and offer as well.
Filing ITR Before Deadline
Income tax returns (ITR) filing is the basic and most important obligation that everybody must fulfil within stipulated time frame. From FY 2018-19, late filing of ITR will attract penalties, therefore you must make a resolution to file the return within the final deadline. ITR is one of the most important document which is required for important financial transactions like getting a loan etc.
Switch Job Carefully
Switching jobs for good career prospects is quite common among millennials. This New Year, you should make a resolution to stick to a stable job that caters to your expectations on all aspects. You must consider things like job location, profile, tax impact, facilities and flexibilities when changing jobs.
Manage Debts Smartly
This year focus on cutting down on your debts to a lowest possible level. Although, the interest rate is at a very low level, but it may spike anytime in future. You should be careful and take loans only for necessary things so that it doesn’t pinch your finances. Before taking up a new loan, try to clear all your outstanding debts as much as possible. You can also consolidate several loans into one by taking a low interest single loan and repaying the rest. It will help you to concentrate on a single loan product and help you to reduce the stress of multiple loan management. Use credit card according to your financial capacity as it has to be repaid ultimately by you only.
Financial resolutions that you make this year should be closely linked to your short and long-term goal. Purpose of the New Year resolution is to inculcate financial discipline. If you strictly adhere to your resolution, then you’ll stay financially secure and there is a greater chance of achieving all your financial goals within stipulated timeline. Apart from above mentioned resolutions, as a millennial you should also focus on resolution such as to get sufficient life cover, health cover, invest money as per goal and always maintain adequate contingency fund.(The writer is CEO, bankbazaar.com)