Jan 1st is just another day, but we tend to think of it as a time for new beginnings. If you are looking to do a better job managing money, here are 17 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 2022
- 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: As a complete beginner, how do I get started with money management?
- I will reduce preferably stop eating all forms of sugar (white, brown, jaggery, honey etc.). Sugar is an addictive slow poison and can destroy your health. Sugar: The Bitter Truth
- I will eat fewer carbs. The SEBI multicap approach would work great for a diet. From 70-80% carbs, why not reduce to 25%?
- I will stop or at least reduce eating out – too much sugar; too much salt; What is good on your tongue is often terrible for your body. See: Warning, you could be the next diabetic! Simple steps to prevent, manage and even reverse diabetes.
- Ps. I have been on a low carb, no sugar diet for 4+ years and a low salt diet for about a year. I eat only veggies for lunch and dinner with milk and nuts for breakfast and afternoon snacks. I have also got ridden of caffeine over the last few months. The next step is to stop dairy. The benefits are multiple (weight loss without relapse; better fitness, cholesterol control, sugar control, reduced anxiety etc)
- Rain or shine I will exercise for one hour a day. I will also double this time to think about my life and to 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 I have a need for it. 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. See: Inflation has reduced Rs. one lakh to just Rs. 6000 in 40 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’. I recognise that 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 each time the market slumps. The secret to building wealth with equity is patience and consistent investing regardless of market conditions. 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, suggests stocks, gold, real estate, bonds, 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.
- 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 investing in 2022!