Making a new year resolution is what most people do on the 1st of January apart from wishing each other. For 2021, most people have gone ahead to make resolutions to make their financial position stronger than before, by learning a lot from the COVID-19 pandemic. So, do you also want to be one of them?
Well, it is not late yet. You can still add to your list of resolutions made for 2021. It is wise to have some financial goals or resolutions so that you do not get anxious when economies fall or recession strikes.
Each one of us has to consider their plans, decisions, and actions taken in the former year to know what went well and what should be changed. These can be personal and/or professional. Well, the professional ones are based on a strong but flexible financial plan that can adapt to changing situations.
For making such a plan, here are five resolutions to make this year:
Resolution 1: Pay All Dues on Time
This is the most important resolution to make if you have been defaulting or delaying your payments. To make it successful, start by making a list of such pending payments and writing the reasons of delay against each. Even if the fear of insufficient funds later is the reason, state it!
Then, assess how you will get rid of these reasons and prevent them from recurring. This will take you far from the impression of being a defaulter. Keep in mind that every delayed payment affects your credit score negatively.
Resolution 2: Minimize Debt
If your debt of last year is not cleared, promise yourself to pay it off this year. If you feel that it is impossible to pay off completely this year, at least, make a firm resolution of reducing it to a possible extent.
You should plan on minimizing the number of credit lines you go for in this year. This is because the more credit lines you choose, the more is its reflection of a credit-hungry trait. So, do list the credit lines that you could have escaped for better credit history.
Resolution 3: Set a Rational Spending Limit per Month
If you have never tried setting a monthly expenditure limit, it is the right time to do so. Thanks to the COVID-19 pandemic and ongoing recession! Now, you should plan how to save by putting a limit on monthly expenses. This will help you save you significantly, which you can add to your emergency fund.
Resolution 4: Use Credit or Get a New Credit Card Only if Necessary
Chances are high for you to get new credit card offers with generous credit limits and other perks. Well, do not succumb to such temptations, especially if you already have one or more credit cards. This is because being unable to repay can give a bad impression to lenders.
However, this does not mean that you should not get a new credit card. You can do so only if you feel it is required. The reason should be to fulfill your ‘need’ not ‘want.’
Further, if you already have a credit card with a generous credit limit, it is unwise to use it all. This is especially true if you cannot then repay the due on time.
Resolution 5: Add to Emergency Funds
Very few people think of building an emergency fund. However, the recent pandemic of COVID-19 has made more and more people to do so seriously. Initially, you may have to part with some monthly income portion to make this fund despite having dues. However, this will be fruitful in the near future when you would need some cash in an emergency.
So, which resolution you will be making? One, two, more, or all?