Start the year with these solid resolutions to enjoy financial freedom in the long term.

Ten money resolutions for 2016

Start the year with these solid resolutions to enjoy financial freedom in the long term.

It is that time of the year again...the time to make resolutions in the hope of diligently following them. And, saving money always tops the list! It's not only about how much money you make, but how much you can save.

Decide your financial goals early on - whether you are planning for a vacation, saving to buy a new car or a home and make your new year happier than the previous one. Here are 10 financial resolutions to make 2016 a financially happy new year:

1. PAY YOUR DEBT: Debt can hamper your financial goals. So, ensure that you pay your bills and clear all your debts on time. Prepare to pay off debts that have higher interest to get relief from financial pressure. Pay your credit card bills on time and try to pay cash to the creditors in advance and save some money for yourself.

2. START SAVING BEFORE INVESTING:  Before you embark on investing money, you ought to save. Figure out your modes of saving. Make it a habit to save money every month by cutting down on your unwanted expenses. Open a savings account separately (apart from your existing one) and leave that untouched. Use it as a piggy bank.

3. STRAIGHTEN OUT THE RECORDS: Most of our records are in a shambles. We usually don't keep track of the investments we have made over the years, or rarely do we have the statements in place. We are often unaware of where we are in our investment cycle and whether what we have is good enough to take care of our future. Nominations may not be in place and what had been done could be inconsequential, and in need of a change.

Bank details and communication addresses may not be updated. These gaps need to be filled in and updated in order to take complete stock of your finances.

4. AVOID COLOSSAL WASTE OF MONEY: It is easy to be lured by attractive offers at malls and discounts on shopping portals. Not only do you end up buying what you don't really need, but also deplete your savings to a great extent. Cut down on impulse shopping and, instead, save that money to safeguard yourself against financial crisis.  

5. MAKE A BUDGET FOR THE YEAR: Plan a proper financial budget for the year and follow it strictly. Having budgets for various items of consumption helps, and staying within the budgets ensures that all expenses and goals are met as planned. Letting temptations take over will ultimately result in debts and cash fl ow problems. Keep an eye on your bank statements.

To know your financial status, find out your credit score report and try to improve on it. Update your budgets regularly, and maintain an account for all sources of income and expenses. Proper budgets make it easier to set and achieve financial goals and give you an accurate idea of how much money you are working with, at any given time.

6. BUILD AN EMERGENCY FUND An emergency fund will always help you in times of need. Save some amount of money in an emergency savings fund separately, apart from your savings account. No matter how much you earn, building an emergency fund is a smart move that can help for any future monetary need.

Make it a habit to start adding small amounts of money every month. Remember, it's an investment that can help you in the future or during any personal or family emergency.

7. START INVESTING FOR YOUR HEALTH: As the saying goes, Health is Wealth; and to ensure good health, you have to put aside some wealth in advance. Buy a health insurance and check the insurance payments and policies that will give you benefits during your emergency situation. To avoid the high cost of medical care, a health insurance is important.

Also, joining a gym or health club, buying healthy food and making time for wellness activities can help you stay in shape, and prevent health and medical problems that may be expensive to cure.

8. START SIP: A systematic investment plan (SIP) is the best way to save money and get good returns in the long run. Start planning to invest with a small amount first, according to your financial ability. SIP, through equity mutual funds, is the best way to get good returns.

Try to increase your SIP with increase in your income. To get good returns, you have to invest in SIP through equity and mutual funds for at least fi ve years. SIP is a resolution that can really change your financial world, and you will realise its importance when it yields good returns.

9 CREATE MORE CASH INFLOW: Whether you are employed or have a business, extra cash inflow can be a boon. You can use your talent and financial skills to earn extra by taking up freelance or part-time work. An extra source of income can help achieve your financial goals.

10.START SAVING FOR YOUR RETIREMENT: Retirement planning means saving for your future financial needs. It's better to start planning for retirement as early as possible to ensure financial stability for a time when you won't have a regular income. Start investing in retirement plans such as PPF, NPS and annuity plans and secure your future.