Resolutions are connected with the beginning of a new year.  Making resolutions for a better financial future is easy but it is tough to act on it. Make only one resolution this New Year to stick to the basics of financial success. Smart financial planning and investing are secrets of financial success.

Fix a percent to save as soon as start earning

Start saving early and set aside a fix percent of the monthly income from your very first earning and never deviate from it. A small amount of money can become a serious fortune over time. As your income increases, increase the percentage of saving. The best way is to treat saving as an essential expenditure like other important financial obligations and allot an amount for it. Saving from early days increases risk tolerance because the chances of recover any losses decreases with the age.

Spend wisely

Saving must come at first place then comes spending on desires. Sometimes, people spend impulsively, on things which they do not really need and ignore saving. Easy available credit has also pushed the option of buying almost anything these days without considering their need. Financial planning helps one to understand the difference between needs and desires. The top priority must be to plan for your life goals and then move for other less important things. It keeps one pleased and worry-free. 

Remain debt free

If your investments earn interest, your loan also carries interest. And most of the times this rate of interest is significantly more than that on investments. It’s better to buy things when one has money rather than putting it on a credit card or getting a loan. A few loans can be exceptions to this rule.

Though credit cards are instruments for easy cash, it has been more in news for trapping cardholders. As one doesn’t pay hard cash from its wallet, it doesn’t seem like expenses and one feel less pain while paying from card. Credit card debt charges incredibly high interest rates and fees. If you use credit cards, give top priority to pay the dues at the end of each month. And if you find that you are unable to do this, it’s better to stop using credit cards. Similarly pay off any type of debt as quickly as possible.

Create an emergency fund

To plan for the worst and hope for the best also works for your financial life. An individual, who isn’t prepared for emergencies, is prone to face financial difficulties.  An emergency fund creates the cash cushion to fall back upon in case an emergency strikes. With life having become fast-paced, there are very few things we can hold on to. Any unforseen and unavoidable expenses can make you either to break your investments or go into debt in case of unavailability of a contingency fund.

A contingency fund (minimum 6 months of household expenses, although it depends on one’s personal financial situation) should be invested in such a way that it can be cashed in no time.

Expect the unexpected

“Nothing bad can happen to me”- it is what most of the times people think when it comes to life and health insurance. In fact they are afraid to accept the fact that they may face any serious situation. Watch around yourself and find any casualty where the sufferer had thought that he could be the prey.

A bad happening may lead to financial collapse. Accept the fact that life throws up nasty surprises. And you will feel that there couldn’t be any excuse to not take enough life and health insurance.

Be realistic in terms of return

Most of the times, people don’t invest in equities, they speculate in equities. And when they lose money, they end up in cursing equities. It is important to remember the characteristics of a particular investment product and be realistic. As one can’t expect FD to be volatile in nature, he mustn’t expect equities to give a fixed return in a fixed time period.

Keep Good Records

Record all financial details and share it with your family members. It ensures that your family members are aware of your finances in case of emergencies. Keeping record also helps in tracking and monitoring. And it checks whether you are moving right on financial path.

Enjoy yourself

Be happy and enjoy your life. A happy person gives 110% in everything and it leads to success. You don’t need to be rich to enjoy. You need to be satisfied and stress free. So enjoy your work just like you enjoy the achievements. Evaluate your skills and also your job. Look for new opportunities and prove your worth.