Five money resolutions for 2019; Hint: It's tough, but not impossibleNew Year 2019 is upon us. The year-end parties, fun, and frolic are over. The year 2018 is now only a number in the history of time. But, a new year is also an opportunity to do something differently. Like it or not, we live in a money-driven world. Every penny that you earn could have gone another person’s way. Every penny you spend is somebody’s earning. Our choices will determine our journey. If you do not change your habits related to how you handle money, we can promise you nothing will change in 12 months.

If you are looking for soft personal finance resolutions, we suggest you stop reading right now. This because soft resolutions are never taken seriously. If there is no seriousness, those resolutions never live long enough. Every resolution that you will read about now is a hard nut to crack. Yet, they are doable if you can apply your mind. It is all about your money. Need any better inspiration than that?

1. Save 40% of take-home income

If you are left penniless by 24th of every month, this is for you. How exactly are you planning to live your life? Do you plan to beg, borrow and steal after 24th every month? You know the problem but are not doing anything about it. Life can’t go on like this. Your spending habits are the problem. Despite working so hard, you are not in control. Your expenses are controlling you. There is a way out. Start saving before you can spend. Save 40% of your total take-home pay every month. Did you say impossible? If you can live seven days every month on practically nothing, you can surely live on the rest three weeks by spending 60% of your income. Next year, you would be asked to save 50%, so don’t cringe.

2. Make the 13th EMI payment

Those with home loans, often complain how banks are fleecing them. They are tired of paying 12 EMIs a year. If you expected banks to be your friend, you are mistaken. They loaned you tens of lakhs. They will not rest until they can get every paisa of the dues. Want to change this? Simple, pay the 13th EMI every year. Your EMIs hurt you because the tenure doesn’t seem to end. A fixed sum of money goes out every month and there is nothing you think that can change this course. The 13th EMI actually can. The 13th EMI every year will be like a pre-payment and thereby will reduce the outstanding principal. This has two effects. One, your principal is lower so you can repay faster. Two, the interest charged is on your principal. This means your interest outgo will also reduce over the entire home loan duration. If it’s EMI, 13th is the lucky number.

3. Sunday is no-spend day

Sundays are holidays. This is a universally known fact. If you are taking an off on that day, why shouldn’t your money deserve a break? Make Sundays the no-spend day. Every month, you can have 4-5 no-spend days and in a year you could have 52-53 such days. That’s a neat saving of 14% every year. Money saved is money earned. Estimate how much you would have spent on a Sunday and put that money into a bank account, liquid debt funds or any other investment avenue the next day – Monday. You will be surprised to see the amount that you will save over the course of a year. Year 2019 seems a good year to start this.

4. Salary hike goes into extra insurance, investment

Most people waste their salary hikes. It is absolutely strange that the money that people eagerly look forward to every year is actually wasted once it comes in. Salary hikes make you inefficient. Even a 5% increase every year over 10 years means 63% rise. The first month after a salary hike witnesses ‘celebrations’. Is it really a celebration where you pay more than your salary hike? It is not. The salary hike should actually be used to get something extra for you. Use the salary hike to widen your term insurance and medical insurance cover. If something is left, use it for adding investments to your existing kitty. Do this every month. In this way, you will make your extra money work for you.

5. Job insurance = 12 months emergency corpus

You must have read about job insurance. It is one of the most useless policies that promise to take care of liabilities for three to four months in case you lose your job. However, what you don’t know is that ‘losing job’ actually means termination. Nobody gets terminated today, as the HR manager/department tell you to tender resignation if you want your employment benefits. So, don’t fall for that sham job insurance mumbo-jumbo. Instead, build your emergency corpus to 12 months. The biggest fear that lurks inside every salaried person’s mind is the loss of income. What happens then? Don’t wait to find out! Build your emergency corpus for expenses worth 12 months. If you are even remotely talented, you will get a job within 12 months. The job hunt time could be shorter if you are good. With oxygen for 12 months, you can rest in peace if the unfortunate pink-slip event actually happens.

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. He can be contacted on