Financial Well Being – The 2020 New Year Checklist

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wealth management checklist

Yes, it’s that time of the year again, the time to make those resolutions for the year that we inevitably end up breaking by February if not earlier. Well, this isn’t cynicism speaking its facts, research suggests that 45% of people fail their resolutions by February and less than 20% make it through the entire year. And, what are these ever-elusive goals that we set for ourselves? Invariably the most common resolutions have to do with Physical Health (losing weight, eating healthy, exercising) followed by Financial Health (saving regularly, meeting goals).

Well, the most cited reason for failing at resolutions is lack of willpower, however, this year we’ll try to circumvent failure at least when it comes to our by having a game plan in place and by automating our investments.

Here’s your Financial Fitness plan for 2020, follow it rigorously and you’ll be at a much better place (financially) next year.

Step 1: Budget Better

It’s as simple as creating a monthly shopping list. You know the amount you can afford to spend, you know the essentials and you can even make room for luxuries as long as you can make a saving elsewhere. Writing down your budget with a clear allocation for monthly expenses, rent, savings, goal-based investments can help you be more fiscally responsible. You can use an expense manager such as Walnut or tally up your Bank statements to find out where you’re bleeding money. Whether it’s your morning dose of Starbucks coffee or your cigarette habit, once you see how they add up, you’ll be sure to revaluate your decisions. If you’re looking to get started with a basic budget, don’t overthink it, you can use the popular 50-30-20 rule to get started.

Step 2: Become Debt Free

Debt can be a dark cloud looming over your conscience and can affect your financial behavior greatly. Whether you’re in crippling student loan debt or paying off a mortgage, having a plan in place helps you from getting overwhelmed. If you have multiple sources of debt such as a car loan, bike loan, personal loan and the like, the best way of going about it is striking off these debts one at a time. You can start by paying off smaller debts such as your car loan so that you get some momentum and your confidence starts building up. Slowly move on towards your larger debts so that you can pay them off one at a time.

Step 3: Plan for the Unplanned

Create an emergency fund and get your Health and Life insurance in place. Yes, we know that it feels like a waste of money especially when you’re just starting off in your career but tragedy can strike at any time and it helps to be prepared. Start by creating a rainy day fund that’s at least 6 months of your monthly salary to prepare for emergencies such as layoffs. Also, start your Health insurance as early as possible, the earlier you start the lower the premiums you pay for the rest of your life. You should also invest in a Term life insurance plan as they are cheap to acquire and ensure a financial cushion for your loved ones.

Step 4: Create a Retirement Fund

We know that retirement can seem like a lifetime away, but well so did 2020 at the beginning of the year. Having a clear picture of how much money you need to have saved up for retirement will help modulate your fiscal behavior. Setting your current income as the standard, a retirement calculator will tell you how much of a corpus you’ll maintain your standard of living post-retirement.

Step 5: Diversify, Diversify and Diversify

Never put your eggs in one basket, the stock market can be a calamitous place and to weather the ups and downs of the marketplace you need to have a diversified investment portfolio. Whether it’s mutual funds, stocks, bonds, real estate or bitcoin, you need to have a sufficient “debt v/s equity” ratio to ensure that your boat is steady when the waters get choppy. It helps to have a wealth manager or a wealth management firm in place that can manage your investments for you and tell you how exactly your assets must be drawn up with respect to your financial goals.

Step 6: Automate everything

Wealth Management platforms or investment management platforms such as Wealthfy can help make the journey towards financial health a lot easier. Trusted by the Top Wealth Managers in India such as Aditya Birla and Kotak Asset Management, it’s been voted the top wealth management platform in India. With dedicated apps for Wealth Managers and Clients, it promises a high level of transparency and brings the cutting edge of Artificial Intelligence and Robo-advisory to your 2020 financial strategy.

For more details ask your Wealth Management firm about Wealthfy today

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