It’s 2024! It seems like we have seen everything – from the pandemic to inflation and recession. From a financial point of view, the journey seems like a roller coaster ride. So, how should you approach 2024 in terms of financial planning so that it doesn’t feel like another bumpy ride? You can follow some financial management best practices to make your financial life in 2024 smoother – with minimal hiccups. In this blog post, let’s talk about six financial planning tips for 2024 that would make the new year a watershed year for your financial well-being.
But before we start, just a small preface: don’t treat these tips as New Year’s resolutions. People hardly keep their resolutions. Instead, make these tips a part of your financial management culture and abide by them even beyond. With that being said, let’s dive straight into the topic.
Have Clear Visibility on Your Expenses and Income in 2024
From our experience, we can safely say that a significant percentage of people don’t know where their money is going! That’s right, they might have a high-level idea about their expenses, but they never inspected the nitty-gritty of their expenses – exactly where their money is going.
This new year, 2024, start building the culture of maintaining a personal budget. You don’t need to be a Maths wizard to calculate your monthly expenses. There are many free expense-tracking apps that you can use to track your expenses. Heck, you can even use a plain Excel spreadsheet to track your expenses. The key here is to be disciplined. Once you build the culture of recording every penny that comes out of your pocket, the process will turn into a muscle memory soon.
Create an Emergency Fund for Contingencies
The memories of the dark days of 2020-21 are still fresh in people’s minds. Lakhs and lakhs of people – during those days – found themselves out of work, some temporarily and some permanently. It wasn’t just a health emergency – the pandemic was a financial emergency as well. People who didn’t have enough money earmarked for such emergencies found themselves in a very precarious situation.
Remember, emergencies won’t ever come with prior notification. So, in 2024, make it a priority to build an emergency corpus and remain ready to face any contingency – be it a nationwide emergency or a personal one. You must target to keep at least six months’ worth of monthly expenses in reserve.
Have a Clear Visibility Into Your Assets and Liabilities
If I ask you what the total value of your assets is, can you answer it accurately? Or, if I want to know your combined total of liabilities, can you provide me with that data accurately? If the answer to both of these questions is no, then you’ve got work to do. Having clear ideas about your assets, like investments or other immovable assets, helps you remain aware of your financial strength. On the other hand, keeping track of your liabilities – like loans or credit card bills – helps you get visibility into the money that will go out of your pocket in the near term. Without this visibility, you won’t be able to save in a disciplined manner.
In 2024, List Out Your Goals
Listing out your goals helps you visualise the ‘why’ of your investments and other financial decisions. Why are you earning money? If you don’t have a passionate answer to this question, then earning becomes a chore, and you can never be a disciplined investor. This 2024, list out your goals to give a proper direction to your financial decisions.
If You Aren’t Insured, Let 2024 Be the Year You Get Covered
If you’re currently without insurance, make 2024 the year you prioritise comprehensive coverage for both your life and health. Investing extends beyond the realm of wealth accumulation; it encompasses the vital aspect of safeguarding your well-being and that of your family. Term life insurance coverage is crucial for ensuring the protection of your loved ones, providing financial security in your absence. Along with that a comprehensive health insurance is paramount to safeguard your savings in the face of unexpected and advanced healthcare needs. In the coming year, make a conscious decision to obtain both life and health insurance. With these dual protections in place, you can confidently navigate life’s highs and lows without the burden of fear.
Let This New Year Be the Year of Your Financial Renaissance
Let 2024 be the year when you take some so-called unconventional steps to supercharge your financial management. Make a will to ensure that the heir to your property faces zero problems in the future. Similarly make sure that you have added a nominee to your investments. Estate planning is another overlooked aspect of financial management. You must plan your estate the day you own a property to avoid problems in the future.
Finally, remember to quantify your financial planning in 2024. Don’t rely on your gut feeling. Rely on data. In case you need help, talk to a financial planner.
We wish you a happy and prosperous new year ahead. Wish you all the best in all your financial endeavours.
If you have a question, share it in the comments below or DM us or call us – +91 9051052222. We’ll be happy to answer it.
~ Nischay Avichal
