What financial resolutions should be planned for the new year?

So with the new year round the corner... Bonuses might come through... but more essentially.. What financial resolutions should be planned for the new year?

Some tips when planning (Not a new mantra...just some wisdom and old information which we might have been forgotten or ignored)

1. Preplanning or Re-Planning your Budget: Sometimes we ignore some of the small sources of income and also miss out on the small leaks of expenses in our daily busy lives. Once a year... it would be good to be reflective and just relook at where some of the money just disappeared....Only a small leak is needed to sink a boat... would be good to recheck the small leaks

2. Emergency funds: If you are thinking.."What emergency fund?" ...Well imagine if you did have an emergency? Something as simple as loosing your job! The rule of thumb for emergency funds is 6-9 months of expenses... It's a buffer good to keep a check on...sometimes it gets dried up... best time to top it up is usually when the bonus flows in..

3. Plan for Big Life Changes: Marriage, Children, Starting a business or buying a house, Kids going to University or even retirement... When best to start saving for these potential life events? Answer: The sooner the better... the cost of delay can be very expensive. Time passes by very fast and these commitments will just come knocking on the door...

4. Start paying down your debt: Very essential that you consider the cost of the debt which you may be carrying... Personal Loans and Credit Card debt is one of the most expensive forms of debt.. Try to avoid carrying debt that's not essential... and paying it down is most important..to ensure that other financial commitments can be met in the future. Exactly one of the reasons to ensure your children don't start life with a debt.. plan for their university while you can.. giving them a strong foundation will ensure they get a slight head start at facing life with confidence.

5. Protect your Income: All of the above strategies can go down the drain; if the source of your wealth dries up.. YOUR INCOME... Income Protection is very essential for any budget and financial plan. Your income can be hampered due to two potential reasons... loosing your job or a major recession (Point 2 is what comes handy then) or you if you fall sick and are unable to work; then who continues to pay off the debt or pay off expenses? Insurance companies have in the last 30 years started building income protection products usually called Critical Illness Protection Plans which would provide you a lump sum which would support your family for an additional 3-10 years.

6. Fulfill atleast one dream or desire: Do put aside a small fund to ensure you fulfill your desires as well.. or else regret kicks in or end up taking up unnecessary debt. No point in killing desires... But plan these splurges as well.

If you find it useful.. please share this with your friends and family as well. A lot more tips have been written in my book "28000 - Make Everyday Count" which is available in 3 Languages: English, Hungarian and Bahasa Indonesia

www.sanjaytolani.com

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