Some Financial Resolutions for 2012

‘I’ll go to the gym everyday’, ‘no red meat for me’, ‘no sweets’… The list is endless.  Sounds familiar.  Right? Comes the new year and along come many resolutions; most of them health related. It’s good to be health conscious. Health is wealth after all. But how about making some resolutions for your financial health for a change this time around?

     1.     Review and Analyse

I know you have clearly chalked out your short term, medium term and long term goals and they are the writing on the wall. But your short term goals may change due to changes in your lifestyle or circumstances, such as an inheritance, marriage, birth, house purchase or change of job status and that can interfere with your medium and long term goals. It’s very important to revisit and revise your financial plans so that you stay on the track with your long term goals.

      2.     Mind your credit card usage

Credit card these days is synonymous for convenience but convenience comes with a price attached to it. You have a period of 45 to 50 days which is a zero interest period; there after the charges are approximately 3% per month or 43% per annum because it is compounded, not to forget the service charges. Horrendously expensive!  So if you succumb to the pleasures of using a credit card often, it’s time now to start using it judiciously.

      3.     Planning for the Unplanned

Do cut down on the red meat and the sweets and start going to the gym every day, but do have a proper health insurance plan in place if you don’t have any. If you already have one then please ensure that the sum assured is adequate and you pay the premium on time. Same goes for your life insurance and home insurance. I’ll not go into motor insurance details here because it is compulsoryJ.  Apart from insurance another most important thing is to have a contingency fund which is equal to your six months expenses for any unforeseen problems.

     4.     Financial Education for your Children

A little bit of financial education from the very beginning goes a long way in churning out future Warren Buffets. Do not hesitate to discuss financial matters in front of children (teenagers). In fact do involve them in making financial decisions. Explain them the daily budget of the household and how it affects the family. This will create a better comprehension of not only how the household works but also provide awareness for what to do in future.

More on this would follow later.  Do keep reading my blog. Happy New Year!! Stay Blessed!!