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Simple Steps to Start 2019 on the Right Financial Foot

Right Financial planning in the new year

For many individuals, New Year is an opportunity to wipe the slate clean and make a fresh start. Along these lines, a lot of us aim to get in better shape or drop some bad habits. However, your resolutions shouldn’t be limited to your physical self. Whether you are a goal setter or not, this clean slate of 2019 should be taken as an opportunity to set some goals and improve your financial self.

Regardless of where you are on your financial journey, here are some steps to start 2019 on your best financial foot.

Set A Budget You Can Stick To

Essentially the most basic step, creating a budget will help figure out how much you bring in and what goes out. For that purpose, check your income, track your spendings and determine how much goes toward essentials needs and how much is left for extras.

Put simply, determine you spendings in a way that it doesn’t put you in cash-crunch at the end of each month. This will not only help you live more prudently on a monthly basis but will also help you plan towards and reach your financial goals.

Create a Cash Cushion for Emergencies

If you haven’t created an emergency fund already, this is the year you should start creating one. If you have a medical emergency or lose your job, you can use this fund rather than taking on more debt. Moreover, you will be relieved that you don’t have to dip into your hard-earned savings when you are thrown for a loop.

Therefore, have a cash cushion that can cover at least 3 months of your living expenses; 6 months is even better. For doing this, add your living expenses and decide how much you can afford to set aside each month.

If you have already created a cash cushion in the form of an emergency fund, it’s a good idea to check if it is still adequate for your needs.

Get Some Term Insurance

Thanks to affordable term insurance plans in India, term insurance has become much more accessible to everyone today. Getting a fairly inexpensive term insurance plan will not cost you very much. A young, healthy individual in his 20’s can get a 1 Crore Term Plan for around Rs. 750 per month.

Moreover, having sufficient coverage in the form of term insurance will help cover most of your expenses, pay off your outstanding debts, and still have a healthy nest egg left over for your loved one’s future.

If you already have term insurance in place, it’s a good idea to look over your existing plan and make sure that it is still adequate. If it is no longer sufficient to fully protect your loved ones in your absence, consider increasing your coverage.

Make An Investing Goal And Automate It

Is there something you would like to start investing for in 2019? Retirement should be an obvious and the most important goal, but what else? Would you like to save for your child’s higher education or are you thinking of buying a new house a few years down the line? Give some thought to these important financial goals and opt for a suitable investment strategy to achieve them.

The money you need in the next five to ten years for these goals can be invested in Unit Linked Insurance Plans or ULIPs. ULIPs are insurance plus investment products that provide you with life cover along with the ability to invest towards your goals. In ULIPs, the premiums that you pay are invested in funds of your choice as per your risk appetite. Moreover, ULIPs offer you many benefits including top-up facility, switch fund option, tax benefits, multiple fund options and so forth.

Once you decide to invest towards your goals, establish automatic withdrawals from each paycheque to go towards your investments. Automating your payments will ensure that your investing goal is regularly being contributed to.

Make 2019 Your Best Year Yet

By taking these few steps, you can set yourself up for a great 2019. However, don’t just stop there, review these steps every couple of months. This will ensure that your budget is working for you and if you can afford to boost your investments any more.

So, finally, when the time comes for your retirement or making big purchases, you will be thankful that you took the time to prepare for your future.

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