By Prakriti Kohli
It is the time of the year when you realize your old resolutions did not work, and start off to think of new resolutions you want to be fulfilled to live your life in a better way. I would like to ask you ‘Would you like your financial life for the next 5 years be the same as how it was 5 years ago?’. If you think your financial life is taking you nowhere, read on.
The points suggested below are not exhaustive solutions that can change your financial life completely, but are surely a heads up for starting to addressing issues that you face on a daily basis.
Tip 1: Get in touch with your history
It would be a good idea to capture the last 5 years – the major decisions you took in your financial life and the reasoning behind it. For example, you may have bought some policy after meeting an agent, or bought a property, or broken a fixed deposit, or added major expenses in your life etc. Make a list of all those decisions over the last 5 years, and write down in detail, the reasoning behind those decisions. What made you do take the steps you did? Do you still feel you did it for the correct reason? Do you feel you were right? Looking back at it, was it the right decision? It is important to be in tune with your past to deal with your present.
Tip 2: Strategize
Most people do not even know which direction they are going in their financial life and where they want to be in the next 5 years. You should really sit down and create a strategy and think what you want in your financial life and to get you in touch with your financial life. So your current task is to apply some brakes on your momentum and investigate your own financial life. Ponder over few things and find out what is important for you. It is all about getting clarity and coming out from a state of confusion!
Tip 3: Make an excel sheet of your financial details
Putting all your financial data in one place is a wonderful way to improve your financial life because you really get in touch with your finances and start thinking about them seriously. For almost 90% of people who do this, it’s their first time taking some time off to focus on their financial life. What was previously a fuzzy area for them suddenly becomes clear and obvious. Just noting down your financial data in one place solves so many queries you had earlier. So what you need to do this Sunday is make an excel sheet containing an exhaustive list of all your personal finance details.
Tip 4: Answer others’ queries on personal finance
You should surely give an ear to those who want to share their financial troubles with you, search the internet about them and try to respond to help them out of the financial mess they have created. There are many ways of giving back to society, and one of them is reading the comments section of a financial blog/page and looking up to help the person asking those queries. If not help them directly, it is equally helpful to imbibe knowledge through the newspaper or watching shows on personal finance on the television. You do not need to give the ‘perfect answer’, but just attempting to resolve someone’s queries and in turn add to your knowledge is surely a great way to address your own financial problems.
Tip 5: Be answerable to someone
The only way to improve it is to be accountable to someone about your promises and actions. Hire a professional Mentor who keeps track of your financial life and your promises, and to whom you report your actions. The mentor can also be your family member or spouse if you want. Declare your actions and deadlines to your family. Do whatever it takes, but ensure you are answerable to someone, if only to some extent.
Views presented in the article are those of the author and not of ED.