Financial experts advise you to make these three financial decisions at the beginning of the year 2024

Here are key three things that you should do at the start of 2024. It’s time for some financial resolutions this year:

 

Where should you start?

1. Create a budget and track your expenses 

First, you can list all your income sources. Next, allocate your income to different spending categories, such as food, housing, transportation, non-essential expenses etc. You should always have a portion of your budget allocated towards savings and repayments of debt. 

Now that you have visibility of your income and expenses, you can make mindful decisions - you can cut down on non-essential expenses and allocate funds for savings and debt repayments. 

 

Remember, if you can’t measure it, you can’t improve it. 

 

Once you create a budget, you should stick to it religiously. You should also update the budget as and when your priorities change - if you are preparing for new financial commitments in the year, such as starting a family or organizing significant events, you should make adjustments in your budget accordingly. 

 

To create and track your Budget regularly, you can make use of simple Excel.

 

Planning ahead will help you stay on top of your finances. 

2. Build an Emergency Fund

 

While you are saving a portion of your income, you should also try to build an emergency fund - this fund will be a lifesaver if and when you face financial setbacks in life, such as medical emergencies, job loss or any other unforeseen circumstances.

 

Ideally, you should aim to cover three to six months of your living expenses in an emergency fund. 

 

While an emergency fund will help you during rainy days, it is your retirement fund that will come handy after retirement. 

 

The earlier you start preparing for it, the better. 

3. Invest in Your Future

 

Financial planning is not just about saving and spending. You should also aim to grow your wealth over time - and investing can help you achieve that. You can invest in stocks, bonds, real estate, and other alternative assets. 

 

Remember, you should never put all your eggs in one basket - try and diversify your portfolio to protect yourself against concentration risk towards one asset class. 

 

Having said that, remember, investing involves risks. 

 

You should understand your risk profile, and only make investment decisions that suit your risk appetite and are aligned with your financial goals. 

 

If you are new to investing, you should look for financial professionals who can help you and guide you through your wealth creation journey.

 

If you want to step into the financial markets but are not sure how, you can explore mutual funds - you can start by investing in Systematic Investment Plans (SIPs) - an SIP helps you invest small amounts of money at regular intervals (instead of lump sum investments).

 

With SIPs, you can start small, and increase the amount of your investments as you get more confident. 

 

Financial planning is a journey.

 

And as you embark on this journey in 2024, remember that every step along the way has the potential to shape your financial future. For a secure financial future, you should have the right balance of discipline and planning. 

 

By investing in financial knowledge and planning, tracking your expenses and diversifying your portfolio, you can navigate the seemingly not-so-easy financial world with ease.

 

Let this year be not just about new year resolutions, but a resolution to start your journey towards getting financially fit.