5 Financial Resolutions for the New Year

Enter the New Year with promises that will help you to improve your financial health…

The financial year 2012-13 has been quite eventful. Though it was not a year worth remembering for all those who were long on the equity markets, investors who parked funds in gold gained substantially. Going forward, though making money from the equity or the commodity market looks difficult, following basic financial discipline can make a big difference over a longer time frame. Here are a few resolutions that you can make for the coming year, which will definitely help you in the long run...

I will not undertake ad-hoc investments

Rather than making disconnected investments over time, make investments that will seamlessly merge with your overall financial plan. This will ensure that the investment plans you choose will not only lead you closer towards your goals but, will also suit your risk taking ability and capacity.

I will continue to service my loans on time

Skipping an EMI (Equated Monthly Instalment) comes at a huge cost. Banks charge heavy penalties if EMIs are not paid on time. You may not only have to bear a higher cost but your credit record may also be adversely affected. This could make things difficult, if you wish to acquire another loan… Therefore, from your income, first keep aside sums due for all repayments and then undertake your investments, savings and expenses, in that order.

I will pay off my credit card bill in full

Credit cards are the cheapest source of funds if repaid on time and the costliest form of a loan if not paid by the due date. Postponing payments by just paying the minimum amount can be very dangerous. You may end up in a debt trap, which may be difficult to get out of…

I will not indulge in ‘double your money quickly’ schemes

A number of ‘double your money quickly’ schemes keep coming up from time to time. Prima facie, all of them appear to be foolproof. But eventually, few keep up to their promises. Let alone expecting returns, most of the times, investors have to abandon hopes of getting their principal back.

I will not invest in the stock market based on ‘tips’ from friends and relatives

Many retail investors bet on fundamentally weak and operator driven shares recommended by friends and relatives in search of quick gains. Investors often burn their fingers and lose their hard earned money in the stock markets. Thus investing without knowing the fundamentals of a company should be avoided.