Financial Fireworks: 7 essential money resolutions to ignite your prosperity in 2024

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financial planning journey. Budgeting helps you allocate your income towards expenses, savings and investments. You can begin with 50/30/20 budgeting that allocates income as follows: a) 50% towards needs or non-negotiable expenses such as food, clothing, rent, EMIs, medicines, kid’s fees, utility bill payments, etc.

b) 30% towards wants or discretionary expenses such as eating out, movies and other forms of entertainment, subscriptions, vacations, etc. c) 20% towards savings and investments for financial goals such as an emergency fund, life insurance for income earners, health insurance for the entire family, child’s education and marriage planning, retirement planning, down payment for house, home loan repayment, starting a business, etc. Once you become comfortable with 50/30/20 budgeting, consider increasing the savings and investment component beyond 20%.

Money resolution for 2024: Start budgeting today if you are not already doing it. If you are already doing it, check how to improve it. In the above section, we discussed how to allocate money towards savings and investments with budgeting.

Once the money is allocated, you can automate your investments through systematic investment plans (SIPs). With SIPs, every month, a specified amount will be deducted from your bank account on a specified date and invested in a specified mutual fund scheme. Automation helps you become a disciplined investor, create wealth with the power of compounding in the long term, and achieve your financial goals.