6 Key Financial Resolutions for 2023
By Akhil Chugh
Date January 1, 2023
The start of a new year is a great time to set goals for yourself, especially as related to your personal finances. Starting off with a clean slate and creating a plan for the financial milestones you hope to reach can help you hit the ground running in 2023. Hitting your financial goals won’t happen overnight, and it’s easy to lose track of them as the year progresses, which is why it’s important to set clear goals and benchmarks.
So, let’s talk about some key resolutions that will make an individual financially healthy. These 6 resolutions can help you financially in the long run and benefit you substantially to achieve your investment goals.
1. Don’t just save, invest smartly:
Simply saving is unproductive if you don’t compound it by investing. Saving money is the first step to growing your money. But, simply saving is an unproductive exercise. To create wealth, investors should go further and invest that saving. Wealth can rapidly snowball through compounding. But one will have to invest for the long term to harness the power of compounding.
The only way to grow your money is to invest it in a mix of mutual fund categories as per your risk appetite and investment horizon. However, don’t blindly chase returns. Stick to asset allocation to effectively balance risk and reward in your investment portfolio. Contact Net Brokers team of experts today to design a suitable financial plan for you aligned with your goals and risk appetite.
2. Set your financial goals:
Financial Planning begins with a list of your financial commitments. Categorize each financial goal as short, mid, or long-term with a specific target in mind and with a particular target date to complete the same. Below is the guide to help you define your goals
- Short-term financial goals: six months to five years
- Mid-term financial goals: five to 10 years
- Long-term financial goals: more than 10 years
Focus on your financial goals, prioritize them, and then select investment options that best match your requirements.
3. Build an emergency fund:
Having a sufficient amount of emergency corpus can make the difference between muddling through a crisis or falling off a cliff. No matter how much is your salary or monthly EMIs, keeping 5-10% of it in an emergency fund – preferably in liquid and safe investments such as liquid/arbitrage funds can make a difference in times of crisis.
Investors should make a resolution to have money saved in an emergency fund – 3x monthly income is a good start, 6x is ideal and 12x would be good to have. Doing so will help you tackle the ebbs of life while you enjoy its flow.
4. Get health insurance:
Other than having an emergency fund, having health insurance is also essential. Insurance is aimed to help you tackle the ‘uncertainty’ of life. Ever thought about how will you pay the skyrocketing medical costs in case of hospitalization? The answer is Health Insurance.
This is a broad idea of adequate health coverage. However, you must analyse your family history, age, pre-existing health problems, and healthcare costs in the city you are residing in.
So, if you don’t have health coverage yet, make a budget and buy the right health insurance plan immediately.
Get in touch with us to learn more about Health Insurance plans.
5. Start tax saving early:
Don’t wait till the end of the fiscal for your tax-saving investment.. Of course, there are only 3 months left for FY22, but you can start planning for FY23. If your idea is to save tax under Section 80C via ELSS, start an ELSS SIP immediately. You not only save each month for your tax reduction but also get the power of rupee cost averaging.
Contact Net Brokers team today to choose the right ELSS mutual fund for you!
6. Unlock wealth creation by investing in mutual funds via SIPs:
A mutual fund pools the money of various investors and invests across different investment categories like bonds, money market instruments, stocks, and other types of securities. Mutual Funds can be the most effective medium for enabling investors to access multiple asset classes such as equity, debt, and gold.
Mutual Funds not only involve a wide range of categories and schemes that ensure there’s something to offer for all investors, across different risk appetites and investment horizons, but even their returns have also historically proven to outperform most traditional fixed income instruments like bank FD, PPF, etc, especially in case of equity investments over the long term.
What more? If you wish to do away with the constant worry of timing the market, mutual funds offer the SIP route of investment wherein you can start investing a pre-determined amount at a particular date and frequency (like monthly, quarterly, etc.). SIP inculcates financial discipline, provides rupee cost averaging and can unravel the magic of compounding to create wealth in the long run.
There are so many ways to save your money and grow it. Choose how you wish to do it. The most important part is to abide by your financial resolutions to bring in a healthy change in your money habits.
Whatever your 2023 financial goals are, we at Net Brokers can help you achieve them with our bespoke financial plans designed as per your investment horizon and risk profile.
It is very important to seek the consultation of an unbiased financial expert to help you in your financial planning and investments. With the growing complexities of financial markets and the plethora of funds available in the market from balanced mutual funds to multi-cap mutual funds, it is highly recommended to take help from finance experts of Net Brokers, who can chalk out the right investment plan for you based on your goals and risk appetite.
As you celebrate the start of a new year, think about the ways you can better your financial picture and have something to be proud of next year.
Happy New Year!