As another year draws to an end, many of us are looking forward to new beginnings.
This is the time when we set our goals and frame resolutions – a Personal Best (PB), new GPS watch, eating healthier & strength training from start and so on.
Plan for all the above, but clear your “RUNNING JUNK DRAWER” ! – old t-shirts, shorts, medals, shoes, socks, expired gels and so on.
Admit it there’s a ” FINANCIAL JUNK DRAWER ” a financial mess , and also unfinished financial goals, such as lapsed insurance policies, old salary bank accounts, unused DeMAT account, not reviewing your liabilities and so on.
One of the most common financial secret is making a purchase and lying about it, maybe it’s paying full price but saying you bought something on sale, or claiming a new purchase is something you already own. “Hiding income, large credit card debt and having a secret bank account are bigger common financial secrets.”
Individuals often turn blind eye towards financial junk, common strategies include not discussing with partners or spouses and not seeking help from a financial advisor.
How to tackle all this ?
The one you’re least willing to tackle first is the one you are reluctant to talk about.
Make a list of financial things on your mind.
Rank it from what you are most likely to talk about with a partner or professional, friend to what you are least likely to discuss.
Highlight red flags – most anxiety-provoking things on that list.
Now that you have a comprehensive list – reverse the order and you are ready almost certainly with the one that needs the most urgent attention.
Few pointers that will help you plan ahead:
Know your goals & time frame
Keep track of income Vs expenditure
Convert saving to investment
Have liability cover in place
Diversify your net worth
Mark cash flow needs
Minimize your debts
Close unnecessary bank accounts / credit cards
Planning for cash flow needs is not in priority for most individuals.
Several things can get in the way of crossing things off your list from past years, but what it really matters is your behavior.
For individuals to achieve goals one will have to take first step rather than avoiding or postponing. Break your goals to shorter ones, this will kick in self belief.
Start small and celebrate the achievement on reaching the milestones .
Embrace change and believe in yourself, “CLEAR YOUR JUNK DRAWER NOW”.
Content : Ajit Kaushal