<p>The New Year is just round the corner. Have you made any resolutions for 2020 yet? Unfortunately, New Year resolutions don’t really have a very long life. According to one study done in the US, one out of five people, or 20%, don’t even act on them and three out of four people (75%) abandon their resolves within 5-6 months. It may not be very different in India.</p>.<p>However, if they actually act on their new year resolutions, there can be a marked improvement in the situation of individuals. Here are eight financial measures to take in the new year. They will not only help improve your finances but also put you on the path of long-term security.</p>.<p>I hereby resolve that in the coming year 2020 I will…</p>.<p><strong>Write down my financial goals</strong></p>.<p>If you are serious about your financial resolutions, start by writing down your goals. You are more likely to achieve your goals if you put them down in writing. It brings clarity to what you really want to accomplish and also motivates you to undertake the tasks required. Write down your financial goals, the amount needed for each goal and the time you have to reach that figure.</p>.<p><strong>Start saving for my financial goals</strong></p>.<p>It’s no good writing down your financial goals if you don’t act on them. Once you know how much you need to save, start putting away an amount every month towards your goals. Don’t be disheartened if you don’t have enough to begin with. Even a modest amount is good enough as long as you do it regularly and diligently. </p>.<p><strong>Buy medical insurance</strong></p>.<p>It’s no secret that healthcare expenses are shooting up. A two-day stay in a hospital can leave you with a six-digit bill. Safeguard your finances against medical expenses in 2020 by taking an adequate health insurance cover. Do so even if you have a group insurance cover from your employer.</p>.<p><strong>Ensure adequate life insurance cover</strong></p>.<p>This should ideally be the first thing to do, especially if you are the sole earning member in your family. If you haven’t bought a life insurance policy till now, immediately buy a life insurance cover that is big enough to cover all outstanding liabilities and future goals. Buy a pure protection term plan, which is the cheapest and most effective type of life insurance. </p>.<p><strong>Get my income tax affairs in order</strong></p>.<p>Tax compliance has become a little complicated in recent years, especially due to the introduction of long term capital gains tax on equities. Make sure you have calculated your tax correctly and all your tax-related paperwork is in order. Take help from qualified tax professionals if you are not clear about any aspect. For a small fee, they can help you with tax compliance.</p>.<p><strong>Not borrow recklessly</strong></p>.<p>Taking a loan is easy. It’s the repayment that makes it difficult. Banks and credit card companies are forever trying to lure customers with offers of personal loans. But one should never borrow unless one really needs money and all other options have been exhausted. Even then, take a loan for the shortest possible tenure and repay as soon as you can.</p>.<p><strong>Choose credit card matching my profile</strong></p>.<p>There are hundreds of credit cards on offer, each aimed at a specific segment or type of customer. Some cards offer higher reward points for online usage, while others waive the fuel surcharge or offer frequent flier points and access to lounge facilities at airports. Choose a card that offers rewards aligned with your usage to maximise the benefits offered on the card.</p>.<p><strong>Renegotiate my home loan</strong></p>.<p>Home loan rates are now linked to external benchmarks. This has brought transparency to a rather opaque practice followed by lenders till now. Home loan customers should find out how their bank is calculating the interest and then compare it with other lenders. If your bank is charging more, it may be time to shift to another lender. Even a 25-30 bps reduction in the interest rate can save you a lot of money over 15-20 years.</p>.<p><em>(The writer is MD, MyMoneyMantra.com)</em></p>
<p>The New Year is just round the corner. Have you made any resolutions for 2020 yet? Unfortunately, New Year resolutions don’t really have a very long life. According to one study done in the US, one out of five people, or 20%, don’t even act on them and three out of four people (75%) abandon their resolves within 5-6 months. It may not be very different in India.</p>.<p>However, if they actually act on their new year resolutions, there can be a marked improvement in the situation of individuals. Here are eight financial measures to take in the new year. They will not only help improve your finances but also put you on the path of long-term security.</p>.<p>I hereby resolve that in the coming year 2020 I will…</p>.<p><strong>Write down my financial goals</strong></p>.<p>If you are serious about your financial resolutions, start by writing down your goals. You are more likely to achieve your goals if you put them down in writing. It brings clarity to what you really want to accomplish and also motivates you to undertake the tasks required. Write down your financial goals, the amount needed for each goal and the time you have to reach that figure.</p>.<p><strong>Start saving for my financial goals</strong></p>.<p>It’s no good writing down your financial goals if you don’t act on them. Once you know how much you need to save, start putting away an amount every month towards your goals. Don’t be disheartened if you don’t have enough to begin with. Even a modest amount is good enough as long as you do it regularly and diligently. </p>.<p><strong>Buy medical insurance</strong></p>.<p>It’s no secret that healthcare expenses are shooting up. A two-day stay in a hospital can leave you with a six-digit bill. Safeguard your finances against medical expenses in 2020 by taking an adequate health insurance cover. Do so even if you have a group insurance cover from your employer.</p>.<p><strong>Ensure adequate life insurance cover</strong></p>.<p>This should ideally be the first thing to do, especially if you are the sole earning member in your family. If you haven’t bought a life insurance policy till now, immediately buy a life insurance cover that is big enough to cover all outstanding liabilities and future goals. Buy a pure protection term plan, which is the cheapest and most effective type of life insurance. </p>.<p><strong>Get my income tax affairs in order</strong></p>.<p>Tax compliance has become a little complicated in recent years, especially due to the introduction of long term capital gains tax on equities. Make sure you have calculated your tax correctly and all your tax-related paperwork is in order. Take help from qualified tax professionals if you are not clear about any aspect. For a small fee, they can help you with tax compliance.</p>.<p><strong>Not borrow recklessly</strong></p>.<p>Taking a loan is easy. It’s the repayment that makes it difficult. Banks and credit card companies are forever trying to lure customers with offers of personal loans. But one should never borrow unless one really needs money and all other options have been exhausted. Even then, take a loan for the shortest possible tenure and repay as soon as you can.</p>.<p><strong>Choose credit card matching my profile</strong></p>.<p>There are hundreds of credit cards on offer, each aimed at a specific segment or type of customer. Some cards offer higher reward points for online usage, while others waive the fuel surcharge or offer frequent flier points and access to lounge facilities at airports. Choose a card that offers rewards aligned with your usage to maximise the benefits offered on the card.</p>.<p><strong>Renegotiate my home loan</strong></p>.<p>Home loan rates are now linked to external benchmarks. This has brought transparency to a rather opaque practice followed by lenders till now. Home loan customers should find out how their bank is calculating the interest and then compare it with other lenders. If your bank is charging more, it may be time to shift to another lender. Even a 25-30 bps reduction in the interest rate can save you a lot of money over 15-20 years.</p>.<p><em>(The writer is MD, MyMoneyMantra.com)</em></p>