What are your financial goals this new year?

The year 2012 is knocking on your doorsteps and we are sure that, like every year, you will set some resolutions this year too. Most people tend to set unrealistic goals that are impossible to achieve. If you are setting such financial goals for the upcoming New Year then think again. You do not want to feeI disappointed.  Instead, set some small goal that can lead you to the big one, use them as stepping stones. Let us discuss five such small goals.

Plan a budget

Making a budget plan can actually save a lot of money. If you do not make a budget, you will tend to spend more. There are several people who earn a modest income but manage to save because they follow a budget plan. You may find it difficult to create a budget for the first time, but that should not stop you. Once you create a budget, try and follow it as much as possible.

Clear your debts

If you have debts to repay, it becomes tough to maintain a good financial plan. Settling all your debts will enable you to save all the Equated Monthly Installments (EMIs) you would be paying otherwise. All you need to do is to make a plan to settle your debts at the earliest. You can do that with relative ease if you are ready to make some sacrifices for a few days. You will stand to be the real winner in the end.

Start saving

Saving is the most important aspect of a financial plan which is why it should be your main goal. Try to save at least 10% of your income every month. Try to assess your expenses to find out where you are spending unnecessarily. Controlling those unnecessary expenses will be the way to save money. Also, add up windfall gains such as bonuses, prize money extra to your savings whenever possible.

Understand finance

Understanding finance will help you a long way. You need not become an expert. All you need, is to understand the basic fundamentals that apply to your investments and finances. There are several books that can coach you on personal finance. You can find useful information on the internet as well.

Think about investing

Once you start saving, start by making small investments. You can start by simply opening a fixed deposit account or investing in a Systematic Investment Plan (SIP) which requires you to invest a small fixed amount in it each month for a fixed period of years, usually three years. You will always have something to learn about investments so keep the curiosity alive.

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