What is your Financial Resolution for 2022

New Years is around the corner, there’s few days left in the year and will be heading into 2022.

There’s no better time than now to plan about what you can do to start the next year off on the right financial footing.

In order to achieve your financial goals, you first have to set them. Setting goals is proven to be an essential factor in finding success, we believe that successful investors start with a plan whether it’s to start saving and investing, or to manage, protect, and use wealth  you have.

To get your finances in good shape for 2022 we have few simple investment resolutions that could make a huge difference to your financial future.

1. Consider the overall picture of your finances and review your portfolio- Make sure your portfolio is consistent with your risk tolerance and goals.
2. Plan for a potentially different tax landscape and manage your marginal tax rate- With an increase in income, tax liabilities too grow. There are arrays of tax-efficient savings and investment tools that not only will help you to save tax on their hard-earned money, but also support in long-term wealth creation goals. If you are at a tax bracket threshold, you might be able to lower your bracket by deferring some of your income into 2022. You can also consider accelerating some of your deductions, such as medical expenses and charitable donations into 2021 versus paying for deductible items in 2022. It is important to conduct this analysis with proposed 2022 tax brackets in mind.
3. Retirement planning of self –Retirement is no longer a set at 60 years of age. People are seen to retire even at 45 years and even at 70 years of age depending on their wish, given the increased life expectancy across the globe. You get at least 25 to 35 years to plan for your golden years from the day you set foot in your work lives. If proper financial planning is done at an early age, even with a small yet regular investment can build a good retirement corpus by the time you retire.
4. Create an Emergency Fund-If there’s one thing the pandemic taught us, it’s that none of us know what the future holds. Things may be going okay financially right now, and you may be just making it by every month on your current salary. But what would you do if a financial emergency arose? That’s why we all need to have an emergency fund in place. Most experts recommend saving up three to six months worth of expenses, but this can take time. So I recommend focusing on a starter emergency fund in the beginning. This amount can be whatever gives you peace of mind, that’s enough money to cover most small emergencies.
5. Save for the Education of children – Higher education is already expensive in India and across the world. This makes it imperative for a parent to plan for the higher education of the child the moment he/she is born. One needs to take into account the current cost of education and inflation in the economy to calculate the quantum of money required when the child grows up. To build the required corpus wealth by the time the child is 18 years old the parent would need to choose investment tools that will not only combat inflation but also ensure that the child’s education happens at any cost. Parents who wish to plan a dream wedding for their children too need to plan in a similar manner to full-fill their wish.
6. Check your Medical and other exigencies – Given the uncertainties of life and growing lifestyle diseases, it becomes an absolute must for all to plan for your medical requirements/exigencies very early in life to get a big medical coverage against a small premium. All medical coverage tools are tax-efficient, thus tax benefits are enjoyed on the premium paid every year.

If you didn’t make as much progress financially as you hoped you would this year, that’s okay reassess your goals, figure out what went wrong, and come up with a new financial plan keeping the above resolutions in mind.

Remember you don’t have to do everything at once. There’s a lot you can do to improve your financial health by taking one step at a time and think of these resolutions as a checklist. Make some real progress on your journey in coming year!

Start your financial Planning with us today! 

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