Agenda 2021: Cultivating Some Great Money Habits For The New Year
With ambitious money goals, reaching them is by building up a collection of daily habits and it’s never too early to make smart financial decisions. With some reading and use of the Internet, a good fiscal regime can be initiated by those in their twenties by cultivating good habits while progressing in their careers. However it’s never too late to start. Take baby steps which become second nature over time, to improve your financial situation. Some money-related habits to master in 2021to help your money grow, can be followed for to build up your financial future.
Pay down debt
Make a point of repaying all debts aggressively and as early as possible, to avoid paying compound interest on the original amount. This will take some effort and much self-control to minimize impulsive purchases. You must learn to cut inessential expenses, get a second job, but you’ll be glad to pay off student debt or credit card loans. If you acquired the nasty habit of repaying minimum amounts on your credit card balance, start a healthy habit of repaying extra on debt to settle credit card debts faster. Without much extra funds, a few hundred or thousand rupees, makes a difference. Use your money for debt repayment and not on other things, and make extra debt payments with any extra funds in your bank account.
Key goals need an ECS mandate
Set up automatic transfers as an easy way to increase savings and grow net worth. To kick-start your savings goals, auto-transfer a dedicated monthly amount of money into preferred savings instruments. If intending to save INR 100,000 as down-payment for a car to be purchased in 2021, an ECS monthly mandate to transfer INR 10,000-15,000 into your savings is useful.
Create a budgeting plan
Drawing up a budget or downloading some app to track expenses won’t be useful if you don’t use them. Use any preferred tool to ensure you’re not spending more than you earn, while setting aside time every month to review your monetary goals. This includes debt to pay off, and amounts saved for a major down payment or even for that amazing holiday plan in 2021 after being stuck at home in 2020. Seeing positive results helps you align with financial goals, and boosts motivation levels
If possible, automate your finances as much as is feasible. With hundreds of small decisions and things to keep track daily, automating your finances reduce your worries about premia payments and tax deadlines. Set up automatic bill payments for monthly recurring bills using your bank app or website. The same can be done for investments and other financial savings for the future.
Before paying yourself, you must take care of the future by investing for retirement and major future needs and it’s easy to start investing in a retirement fund, and have long-term financial goals for growth and savings. Do download client-friendly finance apps to set up an emergency fund, and save for retirement. Begin by investing the maximum amount possible annually towards retirement whenever you have investible funds. For most professionals, remaining with a company for 25+ years and receiving a healthy pension, is not feasible, so investing your money in tax-friendly monetary instruments such as ELSS, NPS, and others are important now.
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