Key financial mantras to follow in 2022

It’s the end of yet another year, but after all endings, there is a beginning; and here we are, all set to start a new year, 2022. The past two years have been tough, to say the least. We have battled the virus, survived one of the worst pandemics, witnessed economic slowdown, and learnt important lessons about getting our financial lives on track.

To begin 2022 on a sound financial footing, one needs to follow some steps that will ensure that we make our money work for us; and no matter how complex that sounds, it actually is quite simple.

If you can, start saving from January 1. It is a very good way to start the New Year. Don’t splurge because it’s the New Year, save because it’s the New Year. The innumerable New Year resolutions most of us make only to break them, let this not be one, for this is that one resolution that will never fail you. Give savings your best and it will take care of the rest.

The trick to save money begins with the inculcation of a discipline. The start may be difficult, but the end is worth it. You must first create a habit, inculcate a discipline, tell yourself you ‘have’ to save, make small changes in your lifestyle, and soon enough, you would have successfully tricked yourself to save. Whatever little or big an amount you can, depending upon your income, expenses and payment burden, save anyway. The size of the amount does not matter, the habit does. Make sure to keep aside an amount on a monthly basis as savings and do not be tempted to touch it, or the whole purpose is lost.

Often times, what we need is lesser than what we think we want. A good financial mantra to follow is to spend on needs, not on wants. Build an emergency fund – have three months’ salary in your bank account to ensure your expenses are covered in the fund, in the unfortunate event of losing a job or business slowing down, or someone in the family falling terribly sick. Choose minimalism – know what to buy; more importantly what ‘not’ to buy. You don’t need everything you add to the cart. Be aware of that.

Align your expenditure with your income to make sure you aren’t splurging unnecessarily. A good practice would be to draw up a list of your needs, then segregate them into ‘urgent’ and ‘later’; keep an eye on deals for the products you have decided to purchase, and look up prices to compare, then choose the best deal after a thorough research. Also, time your purchases right. For instance, if electronic products/gadgets are what you want, Diwali is the best time to buy as there are innumerable offers on electronics around that time.

Investments are a great way of making money work for you. Be it Systematic Investment Plan (like Mutual Funds), or Recurring Deposit, or Fixed Deposit, etc – whatever works for you, just be sure to be wise money-wise. Making it a habit of putting some amount of money in any of the above schemes is a financial mantra one must follow. Having said that, be wary of speculative markets; you do not want to risk your money to wrong investment decisions, neither can you let your money sit idle in the bank. So, do your research, gather adequate knowledge and relevant information, consult experts and only then invest in plans that best suit your current financial status. You can always graduate to other/better schemes as your money grows.

All that money you make and save will have no value if the wealth of health is not on your side. To ensure you are taken care of health-wise, in the unfortunate event of falling sick and mounting healthcare bills, or otherwise, get your health and life insurances in place. Save up enough to get yourself the insurances and make your health a priority. This will in turn keep you away from exhausting all your cash balance when a health concern arises.

Not fulfilling your payment obligations on time works against you, for it not only increases your payment burden, but also reflects poorly on your credit history. If you are in a habit of procrastinating your payment obligations and postponing savings and investments to the next month, make sure not to carry it to the next year. Let 2022 be a new start wherein you do away with mistakes of the past and inculcate good financial habits to keep your credit history clean and credit score high.

If you are planning a wedding, start saving ahead so that you don’t find yourself burdened with loan repayments right after marriage. But if you wish to go beyond the savings for the occasion, then choose the right product for different needs. Consumer durables on Buy Now Pay Later, short-term needs with credit cards or Line of Credit, and other needs taken care of with a personal loan would do good.

Enough of those exorbitant vacations. Make 2022 a year of holidaying with nature, by choosing places that are in the heart of nature. They are not only much cheaper as compared to those overhyped locations every other person has been going to, but they also bring you joy and peace unparalleled. Such beautiful places in sync with nature are better than highly priced travels and locations that leave you stressed about your expenditure no sooner than the vacation is over.