Adding to my previous post of Year End Review I have decided to put down my resolutions for the next year. As I mentioned in my previous post, the following shall be my priority resolutions.
- Purchase only when I can afford it and not on credit.
- Have all the necessary insurance
- Help friends but not with money, no monetary support to friends to get them out of bad situations.
- No high price gifts for any occasions.
A careful thought and I came up with manageable resolutions. I say manageable because itâ€™s a saying that resolutions are meant to be broken. Now I would not want to do that knowing the fact that that this will put me huge mental stress. I and as a matter of fact every one in the world can afford to miss upon their plans as it would surely put you way behind your competition (this includes competition with yourself too).
The other reason to have resolutions is, I found that my money didnâ€™t work as I expected primarily a well thought out plan was not there. So now is the time to have certain guidelines to avoid mistakes that I have already made this year.
I have cooked some more resolutions for the next year.
To have an emergency account
I should set up an emergency account with at least Rs. 30,000 in it. Recent accident, unscheduled bike repairs and unexpected circumstances have provided sufficient grounds for me to have an emergency account.
I will plan my taxes from the start of the financial year 2008
This year I didn’t pay attention to plan my taxes. So I expect huge cuts this year form my salary. Next year I’ll not repeat the same mistake. I’ll fund my 80c investments (section 80c lists investment avenues for tax breaks in Indian income tax act) limits to the full to have maximum advantage. These avenues are primarily low return investments including mutual funds.
Invest only in direct equities
The disadvantage with investing in funds is that you do not have control of timing of the purhase (if it is an automatic/electronic clearing from your account) also it has lower returns as compared to direct equities.
Check on credit card spending
This year’s experiences of card spending have taught me a lot. Today I am out of my credit card debt, but now is the time that I will not make the same mistake again. Even if I spend with my credit card I would never roll-over my debt.
Do not cater to sales call on phone
This year I took my health insurance cover over the phone. I would rather say that the insurance was sold to me and I never realized whether I require it or not. I never planned for any insurance and got stuck with the premium payments that too on my credit card. Next year Iâ€™ll plan all my insurance needs and then purchase it.
Financial planning and Time planning
I have been concentrating my efforts on financial planning (primarily debt reduction) that I would continue to do but I have never paid any attention to my time planning. I would identify where I spend my time and then would make conscious efforts to reduce time wastage.
Improving my career skills
The most important resolution is that I would strive to improve my career/professional skills. Improve upon my resume as my career is the sole source of income to me. I have to improve my financial modeling skills.
These resolutions are surely manageable and more importantly very simple. If I stick to these resolutions I would surely be improving my networth and my overall standard of living by the next year end.
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