Top 5 Financial Resolutions For 2023
New Year resolutions are a great way to retrospect your monetary decisions and take necessary steps to modify or upgrade your financial situation. These financial resolutions can help you utilise the most out of your earnings. 2023 is just starting, so it’s the best time to revisit existing investment strategies or chalk out new ones.
Let us dive into the top 5 financial resolutions for 2023 that will help boost your capital growth.
Top 5 Financial Resolutions
Here are five resolutions that will help you achieve your financial goals for the year 2023:
Design a Diverse Portfolio
Designing a diverse portfolio is essential for investing with long-term objectives. In addition, investing in several assets will keep your portfolio’s risk in check.
An investment portfolio is the collection of financial assets held by the investor. You can distribute your investments in diverse asset classes, like stocks, bonds, mutual funds, fixed deposits, gold, etc., to earn more profits with minimal risks.
Any diversified portfolio should properly distribute money to both low-risk and high-risk investments. As the name suggests, returns on high-risk investments are closely related to market volatilities and confined to emerging companies. However, they can earn substantially high returns over time, whereas low-risk assets involve safer options like shares of established companies and debt securities like corporate and government bonds, fixed income, etc.
Depending on your risk appetite, you may decide allocation to be made to low-risk and high-risk assets.
Settle Your Existing Debts
One of the best financial resolutions for 2023 would be to get rid of your pending debts with higher interest rates. To do so, the first thing that you must do is prioritise your debts based on interest rates. Paying off the high-interest loans first is always advised to save more money.
Loan interest compounds; you have to pay interest for the cumulative annual amount. However, paying off high-interest loans will help you save money. However, ensure that you keep sufficient savings for emergency and basic expenses.
Start Investing in High-Quality Assets
To make the most out of your income during a hard-hit inflation period, make a resolution this New Year to invest primarily in high-quality assets. It will help you keep up with sky-high prices of fuel and everyday goods.
Investments involve risks; therefore, individuals must ensure that the investment is compatible with their age, financial stability, goals and objectives. If you plan to invest in equity mutual funds and stocks, analyse these factors carefully. When investing in stocks, check the financial performance of the company, its prospects and the industry it operates in.
Work on Your Credit Scores
Make a resolution this New Year to start working on your credit score. A credit score helps lenders determine a borrower’s credibility and is calculated based on past transactions and repayment behaviour. Therefore, higher credit scores translate to lower interest rates. That is, having an excellent credit score will let you avail a loan with a lower interest rate.
You can review your credit score via Credit Information Report which is available at any credit bureau portal in India.
Opt for Health Insurance
The pandemic has already proven how important it is to cover your and your family’s financials in the case of a medical emergency. With the rising cost of healthcare, having a health insurance policy is utmost necessary.
Therefore, start investing in family healthcare insurance this New Year to safeguard your loved ones against any uncertainty. What better gift can you give your loved ones than an assured and secured medical fund?
The New Year is when you will feel motivated to improve yourself. So, why not make some financial resolutions for 2023 to improve your finances? Resolutions can help you build self-awareness of expenses and how to utilise investments effectively for better returns and quality of life.
Frequently Asked Questions (FAQs)
What are the safest asset classes to invest in?
Some safest asset classes are cash, gold, government-issued securities and fixed deposits.
How to maximise the returns from an asset investment?
To maximise the returns from an investment, you can opt for high-risk assets, which can earn significant profits over time. However, you must carefully allocate funds for high-risk assets only after proper research and analysis.
How many asset classes are there?
There are five major asset classes: Equity, Debt, Cash, Real estate and Commodity.