Setting Best Financial Goals for 2016 -17..!
By Mr. Ranjit Punja, Creditmantri.com
The new financial year has begun, and this is as
good a time as any to make a New Year’s resolution about your finances.
Many of us simply do not put enough thought into
our personal finances due to lack of time, patience or, sometimes, knowledge.
Organising your finances is not rocket science,
and is probably more a necessity rather than a luxury in the modern world.
Money matters are one of the biggest causes of
stress and it is possible to eliminate some of this stress by following a
systematic plan to manage your money. For this, you need to do 3 things:
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| Ranjit Punja, Creditmantri.com |
1.
Write down your goals..!
There is a certain clarity of thought and action
that comes with putting down your thoughts. Committing your goals to paper (or/
your hard drive!) makes them more
concrete and will help you maintain focus throughout the year.
If you are
doing this for the first time, choose goals that are realistic and limit them
to not more than five.
Be specific when listing your goals. Do not
write, “Save for education”. Instead, a more useful goal instead would be “Save
Rs. 1 lac by March 31st 2019 for child’s higher studies.”
Similarly, do not list “Reduce credit card debt”
as a goal; instead write “Bring down highest credit card balance to zero in
next 3 months.”
Once you write down your goals, it is important
to prioritise them.
For instance, if you have a significant amount of
credit card debt, paying off your bills should be your top priority –
continuing to maintain large balances means constantly accumulating interest
charges that might be difficult to ever fully repay.
2.
Create a financial plan
Creating a road map to achieving these goals
might seem like an uphill task, but it is more a matter of common sense than
any fancy financial calculations. If you are not confident about creating a
clear plan, take a little time to educate yourself on the various financial
planning tools available on the net.
Or if you prefer, you could consult a financial
planner to help you. Make a spreadsheet with your assets, earnings, expenditure
and liabilities (including your mortgage, all other loans and credit card
debts) and make sure you keep updating this spreadsheet.
It might take some time and effort to do it the
first time, but making a detailed inventory of your financial situation can be
hugely helpful in assessing your financial health and identifying the areas
that need your immediate attention. Look at where you can make savings and
where you can deploy these savings most effectively to achieve your goals. A
good plan would ideally include:
Buying adequate insurance coverage
Be clear
about how much coverage you need and buy only the insurance you require.
It can be
easy to be tempted into buying too much coverage that you might not need.
Creating or maintaining an emergency fund
It can be
difficult to spare extra cash when · there are so many financial obligations to
fulfill but it is a much-needed buffer that will help you through a sudden loss
of job or a medical emergency.
If you are in urgent need of funds, a personal
loan may seem like a readily available option but keep in mind that the high
interest rates make it one of the most expensive loans to take.
3.
Revisit your list
Make sure that you revisit your list of goals
periodically to check that you are on track. There is no point making a list of
financial goals if it lies forgotten or if you do not consistently act on it
throughout the year.
A financial goal is like a diet or exercise goal
– it is only as effective as the commitment, discipline and effort you put into
achieving it – and will bring you the same rich rewards
.
About the author..
Office Address:
CreditMantri Finserv Private Limited
4th Floor Sudhama,
36 Vijayaraghava Road,
T Nagar, Chennai,
Tamil Nadu 600017
CreditMantri Finserv Private Limited
4th Floor Sudhama,
36 Vijayaraghava Road,
T Nagar, Chennai,
Tamil Nadu 600017
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