Jan 1st is just another day, but we consider it a time for new beginnings. If you want to manage money better, here are 15 personal financial resolutions and resources to consider for the new year.
In his 2013 Ted Talk, former Google search quality chief Matt Cutts talked about the power of trying something new for 30 days. He says if you try something new for 30 days or stop doing something for 30 days, it becomes a habit, and we are likely to stick to it. So the goal will any new year resolution should be to see it through at least Feb. Hopefully, it will become second nature then.
Money management should be holistic. How we save or invest is important, but our health and time management is more important.
Personal Finance Resolutions for 2023
- I will not be in a hurry to invest or save money – not before I protect my family with adequate life insurance, health insurance and an emergency fund. See: How do I get started with money management as a beginner?
- I will strive to be fitter and eat healthier. See: Sugar: The Bitter Truth and Warning, you could be the next diabetic! Simple steps to prevent, manage and even reverse diabetes.
- Rain or shine, I will exercise for one hour a day. I will also double this time to think about my life and process diverse thoughts. Don’t touch that mobile or headphones! Also, see The art of doing nothing.
- When I read a piece of information on investing, I will ask, “who has written it?” and “what’s in it for them?” (conflict of interest). Better still, I will not consume personal finance information unless required. See The Information Diet: How Less Information Can Make us More Informed.
- I will recognise the importance of inflation and stop obsessing about ‘regular income or pension or “safety” or “guarantees”. See: Inflation has reduced Rs. One Lakh to just Rs. 5741 in 41 years!
- I will list my financial goals first, plan a strategy and then worry about investments. Get started here: Basics of portfolio construction: A guide for beginners.
- I will recognise the returns I need for my financial goals and invest accordingly. I will not madly chase after returns.
- Trading will not make you rich unless you have a lot of money and time to invest. Young earners are better off trying to increase their income. You need money to make money!
- I will ensure all my tax planning is perfectly aligned with my goals. I do not care whether it is April or November; my tax planning depends only on my goals, for which I invest all through the year.
- I will not search for a ‘good pension plan’ or a ‘good child plan’. A good plan is the only one I make based on a diversified portfolio. See: How to build the ideal retirement portfolio.
- I will not worry about my mutual fund holdings when the market slumps. Patience and consistent investing, regardless of market conditions, is the secret to building wealth with equity. However, I must first create a plan that will work in all markets. Also see: Don’t make these mistakes while investing in mutual funds!
- I will not stop my investments because the market is at an all-time -high or wait for a dip. See: Why SIP or lump sum investing need not be stopped when markets hit all-time highs! And Myth Busted: Investing during market dips will result in more returns.
- I will learn to analyse investments beyond returns in a goal-based manner. See: How to Conduct a Personal Financial Audit and Portfolio Audit 2021: How my goal-based investments fared this year.
- I will not be swayed by posts/comments/news that predicts market movements, suggesting stocks, gold, real estate, bonds, or anything. My investment plan is already in place, and I will stick to it.
- I will either be a true DIY investor – research information and take decisions myself or consult a SEBI-registered fee-only financial advisor. (More than 1000 of our readers are working with these advisors)
- Once my basic fortifications (insurance, emergency fund) and savings and investments are in place, I will only look at my portfolio once a year for a review. I will also “graduate” from reading/viewing personal finance content, particularly freefincal.com.
Happy money management in 2023!