Key financial mantras to watch in 2022
It’s the end of another year, but after all the endings there is a beginning; and here we are, ready to start a new year, 2022. The past two years have been tough to say the least. We have battled the virus, survived one of the world’s worst pandemics, witnessed an economic downturn, and learned important lessons to get our financial lives back on track.
To start 2022 on a sound financial footing, there are steps that need to be taken that will ensure that we make our money work for us; and no matter how complex that sounds, it’s actually pretty straightforward.
If you can, start saving from January 1. It’s a great way to start the New Year. Don’t splurge because it’s New Years, except because it’s New Years. The countless New Years resolutions that most of us take just to break them, don’t be. one, because it is this resolution that will never fail you. Give your best to the savings and he’ll take care of the rest.
The trick to saving money begins with instilling discipline. The start can be tough, but the end is worth it. First you have to create a habit, instill discipline, tell yourself that you “need” to save, make small lifestyle changes, and soon enough you would have managed to save yourself money. Whatever amount you can, depending on your income, expenses and payment load, save anyway. The size of the amount does not matter, the habit does. Make sure to set aside an amount on a monthly basis as savings and don’t be tempted to touch it or the goal is lost.
Spend as needed, not wants
Often times what we need is less than what we think we want. A good financial mantra to follow is to spend for the needs, not the wants. Build an emergency fund – have three months’ salary in your bank account to make sure your expenses are covered by the fund, in the unfortunate event of job loss or a downturn in business, or of a family member who becomes seriously ill. Choose minimalism – know what to buy; more importantly, what not to buy. You don’t need everything you add to the cart. Be aware of this.
Plan your purchases
Line up your spending with your income to make sure you don’t splurge on unnecessary splurges. A good practice would be to make a list of your needs, then separate them into “urgent” and “later”; keep an eye on the offers of the products you have decided to buy and look for the prices to compare, then choose the best deal after careful research. Also, time your purchases well. For example, if you want electronic products / gadgets, Diwali is the best time to buy as there are countless deals on electronics around this time.
Investments are a great way to make your money grow. Whether it’s a systematic investment plan (like mutual funds), or a recurring deposit, or a fixed deposit, etc. Making a habit of putting a certain amount of money into any of the above programs is a financial mantra that should be followed. That said, beware of speculative markets; you don’t want to risk your money for bad investment decisions, nor can you leave your money idle in the bank. So do your research, gather the right knowledge and relevant information, consult with experts, and then invest in plans that best suit your current financial situation. You can always switch to other / better programs as your money grows.
Get health insurance
All that money you earn and save will be of no value if health is not on your side. To ensure you are covered in terms of your health, in the unfortunate case of illness and rising health care bills, or otherwise, purchase your health and life insurance policies. Save enough to purchase insurance and make your health a priority. This in turn will prevent you from depleting your entire cash balance in the event of a health problem.
Fulfill payment obligations
Not meeting your payment obligations on time works against you, as it not only increases your payment burden, but also negatively affects your credit history. If you have a habit of procrastinating your payment obligations and postponing savings and investments to the next month, make sure you don’t postpone it until the next year. May 2022 be a fresh start in which you eliminate the mistakes of the past and instill good financial habits to keep your credit history clean and your credit score high.
Manage wedding planning
If you’re planning a wedding, start saving in advance so you don’t find yourself burdened with loan payments right after the wedding. But if you want to go beyond saving for the occasion, choose the right product for different needs. Consumer Durable Goods on Buy Now Paying later, short-term needs with credit cards or a line of credit, and other needs taken care of with a personal loan would do good.
Holidays with nature
Enough of those exorbitant vacations. Make 2022 a year of nature holidays, by choosing places in the middle of nature. They are not only much cheaper compared to those overrated places that everyone else has been to, but they also bring you unparalleled joy and peace. Such beautiful places in harmony with nature are better than expensive trips and places that leave you stressed about your spending right after the vacation is over.
The author, Anil Pinapala, is CEO and co-founder of Vivifi India Finance. Opinions expressed are personal