Wish you and your loved ones a very Merry Christmas!
2019 has been a year that taught me a lot. From interacting with investors in person or over phone calls on why long term investing in the share market in India is probably the only way to create wealth and answering repeated queries on whether gloom or doom is going ahead, 2019 was an overall pleasant experience.
There have been a lot of learnings throughout the year. And I have used those learnings to draft my resolutions for 2020 and beyond.
Here's how I went about thinking about what needs to be done:
I listed down the goals I have for myself over the coming years such as immediate goals, medium-term goals and longer-term goals. My immediate goals include buying myself a professional camera, while my medium-term goals include purchasing a new car in the year 2021. My longer-term goals include buying a bigger home and planning for my retirement to live a similar lifestyle I live now or even better without having to depend on anyone else, etc.).
Then I listed the resources that I would have on hand to achieve those dreams.
Talking of the gaps, I may be able to buy the camera, rather easily. But I may have to think twice before purchasing a new car in 2021. So, it would be better if I start planning now. Thinking of a bigger home and planning for my retirement, my heart told me something - "Harsh, start finding another full-time job that you can do alongside your current employment."
My heart surely knows that isn't possible. But what it means is I need to plan a lot of lot better going forward. Here are my Financial Resolutions I will take this New Year:
I will plan my savings in a way that I can surely follow and invest a certain amount by the end of the year. This is extremely important if I want to ensure my family & I get to live a comfortable life in the future and never have to adjust for anything.
Planned Expenses: I will completely avoid impulsive buying - as I say this, I know it is going to be the toughest one to do, but I need to start doing it now - after all, it will have some impact on my finances in the future.
I will ensure I invest my savings wisely. I will not just trust anyone into putting all my savings in 1-2-3 baskets. I will spread them across systematically. I will read, do my bit of research and only once I am satisfied, will I commit to investing my money there. I also need to understand I have different goals/dreams - I need to save and invest accordingly for each of them. E.g., I cannot be allowing myself to buy a new car at the expense of my retirement plans.
Be it going for speculative investing in the stock market or being speculative about some rumours or investing based on gut, I will altogether avoid all of it. I will ensure I do not fall into this trap and invest my money systematically. Know more about the perils of investing based on tips.
Investments don't need 24x7 surveillance:
I shall invest wisely and also keep a track on my investments, but I shall not monitor them minute-by-minute. Just because there is technology available to do so, doesn't mean I misuse it that way. Just because the markets go up and down, I will not indulge in impulsive buying or selling. Read about the importance of patience in stock market investing here.
Invest in health & life Insurance:
Medical bills are rising by the day. I am extremely healthy today, but I do not want to speculate about it for tomorrow. I neither want my health to be a burden, especially a financial burden for anyone. Plus, just in case if something terrible has to happen to me, I need to have enough money for my family not to at least worry about money.
Use my credit cards wisely:
Credit cards offer the convenience of not carrying cash in your wallet when you want to buy things or travel. However, the credit aspect of buy now and pay later sometimes motivates most of us to spend on some things, which we would have otherwise probably not have bought on cash.
Although I use my credit cards very wisely, sometimes I end up missing the payments on time resulting in unnecessary pile up of interest. So, this is one area which I am certainly going to focus on.
Avoid unnecessary shopping:
There is a popular joke doing rounds these days on WhatsApp and Facebook. Here’s the joke “Do you know what is the best way to save money on online shopping portals? Simply uninstall their apps and you will end up saving a lot of money”.
The ease of shopping from the comfort of our homes or office in few swipes has most of us buy a lot of things we probably even don’t need or hardly use. I personally bought many things which I hardly use and this has made me realize the pitfalls of impulsive shopping. Not only do these unnecessary goods eat up your money, but also clutter your house. So, I have decided to strictly buy only those things I need especially when it comes to online shopping.
Easier said than done is what I've heard. But if I can't help myself, who else will?