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Lucky 9 – Financial Resolutions for 2009

The start of the new year is a great time to review your financial habits and set your resolutions for the year. We hope that the following 9 tips help you achieve even more financial security in 2009.

1. Create an emergency fund
Nobody has seen the future or what unexpected events might come into our life. Best to be prepared with some cash that you can keep readily available for any emergencies – whether it’s a unforeseen travel, or say a quick repair for your car.

2. Get health insurance or renew my insurance on time
Healthcare costs are rising very fast and are often unaffordable, unless you have health insurance. Make sure that your coverage is always valid and there are no gaps in renewal – medical emergencies don’t come with a forewarning.

3. Reduce the use of credit card debt
Credit cards charge interest at anywhere > 30% per annum – don’t fall into the credit card trap. Spend within your means and always remember that whatever you spend on your card still needs to paid off by you at the end of the month.

4. Educate myself about basic financial planning issues
Financial planning is a major step towards achieving financial security. It can help you become better prepared for whatever life throws at you. Do make yourself aware of basic issues such as your net worth, when your debts need to be paid off, your retirement goals, your capital needs to buy a house/car/appliances

5. Pay my bills on time to avoid late fees
We all delay paying our bills and before we know it we end up paying penalties and fines. If you have the money, pay your bills on time. Why make your mobile operator or bank branch richer by paying them regular late payment fees?

6. Utilize all the tax deductions available to me to save up to Rs 1 lakh
Combine all the available deductions under section 80C and other laws to save up to Rs 1 lakh per annum in taxes. You lose these if you don’t use these! So, take advantage of these to reduce your tax payments.

7. Maintain a budget tracker to control my expenses
Do you know where all you are spending your hard-earned money? Just by regularly tracking your expenses you can identify whether you are living within your means or stretching yourself too much. Additionally, you can then understand what to do with your surplus funds, or what expenses you need to reduce to save more.

8. Diversify my investments and match them to my risk profile
Don’t just rush into investments unless they are suited for your level of risk tolerance. Understand that sometimes its best to diversify your investments to reduce risk.

9. Prioritize financial goals that are important to me
You will never hit the target if you don’t even know what your goal is. So, identify and prioritize your financial goals and when you would like to achieve them by. For instance, do you know when you want to buy a house and its cost, what it will cost you for your daughter’s wedding 20 years from now, or your retirement expenses 10 years from now?

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