What are your new year resolutions? Do they include quit smoking, getting in shape or pledge to spend more time with your family? Do they also include getting your finances better? The new year is the best time to make financial changes for the better, and follow them throughout the year. Resolutions aren’t supposed to be a one-shot deal, they are something to strive for throughout the year.

Firstly, start with making a goal – it doesn’t have to be a complicated one. Try to make it simple, sorting out your debts and getting rid of them one by one, building an emergency fund, or making a budget for a big expense.

To help you get started, here are a few financial resolutions that you can start with if you are trying to get out of debt or save money:

Take care of your Debts
Ease of access to easy credit, both for short term or long term, has made borrowing money increase drastically in India. On account of which, the debt of borrowers has also been increasing. Experts say most individual borrowers do not take managing their debt seriously and, hence, get stuck in the never-ending cycle of repaying loans. This way most instead of achieving financial goals and planning for a healthy financial life, end up worrying about clearing their debts.

To manage the situation, make a note of all your dues. Then cut down on any extra money spent on non-productive activities, this way you can focus all your extra money towards clearing your dues. Also, try to avoid unnecessary splurging, using a credit card or online credit, that way you will just increase your liabilities.

Get yourself an Emergency fund
An emergency such as job loss, urgent medical attention or when there is uneven cash flow, having an emergency fund helps a lot. An emergency or a contingency fund is a certain amount of money maintained in an emergency fund. It is usually equivalent to three to six months of an individual’s monthly expenditure. For small-ticket unexpected expenses, this investment can be utilised.

One can park their money in liquid or short-term mutual funds. With these options, one gets quick liquidity. Also, funding such expenses through the emergency fund may not lead to any significant loss in interest income. Experts suggest investors should also consider exit load of a scheme, along with tax implications, and future potential of the scheme before exiting a scheme.

Get rid of habits that cost you most
Most of don’t even know where the extra money spends on various lifestyle activities. Eating out, partying, shopping, entertainment, are all expensive altogether. By cutting down some of these expenses you’ll not only improve your lifestyle, but also your health, and your wealth.

By cutting down on unnecessary expenses and keeping a track of your expenses, you will save quite a lot of money at the end of the month, which you can put to good use. Also, get rid of things you don’t use anymore, for instance, there can be memberships and subscriptions that you are paying for which you do not use any more. Consider cancelling them, that way also you will save a lot of money, which can help you pay off other dues quickly.

Get insured
Be prepared for unforeseen and unfortunate events. Getting a health insurance policy, along with life insurance (if you have dependents), is utmost necessary. For life insurance try to have a sum insured of at least 10 times your annual salary. To get a better idea you can visit web aggregators and insurance company websites and find out your insurance requirements.

Health insurance is a must, given the rise in medical costs. If you are an employee, do not rely only on your employer-provided health insurance, as they not only come with lower sum assured, if you are in between jobs, you will be left without any insurance cover. People with family can opt for a family floater plan with the sum insured ranging between Rs 10 -20 lakhs, depending on the policyholder’s need or else an individual plan with a minimum sum insured of Rs 5 lakh.

Although it is important to get insurance and make investments, do not mix the two, get separate products for each.