Updated on: Saturday, January 08, 2022, 11:10 PM IST

Personal Finance: Here are five easy disciplines to follow in 2022

Actions you should take if you want to improve your personal finance this year

At the turn of each year, we possess new energy to achieve our dreams. This individual expectation is like a cycle. Everybody wants to succeed, at least in their minds, but not everybody will. Below is a list of five actions you should take if you want to improve your personal finance this year.

1. Review the past year

The first thing you should do is to analyse the past year. Research has shown that out of the several that make 'new financial resolutions' every year, less than 10% get to follow those resolutions through the year. Does it not bother you that at the beginning of last year, you also made resolutions that you failed at? Why turn around in cycles every year? Take a pen and paper, sit down and review your financial activities for the past year — from your income earnings to spending. Break down everything into tiny bits and you will have a clearer picture of why some of your financial desires didn't come to pass. It could be that your total expenditure outweighs your income.

Simple Guide: Create a ledger of credit and debit. Every aspect of your income, no matter how little, should come to the credit side while expenditures come to the debit. Sum each side up. If your debit is over 30% of your credit, do you still wonder why that financial dream of yours was out of reach in the past year?

2. Create a checklist

The second step is to create a check-list of your financial matters while including 'Emergency' as the first in the check-list. This is because emergencies will always arise at any time and can dent your plans if you are not adequately prepared. The best way to create this checklist is to break each financial matter down into months. Many people go through the year with a false belief that they have everything sorted in their heads. The reason they fail is that human beings are susceptible to memory loss. Sort them out in black and white instead and you will feel motivated each time you look at the checklist.

3. Set specific goals

After creating the checklist, the next step is to set your financial goals complete with specific dates. That is only when your wishes become goals since the dates act as deadlines thereby putting you under delightful pressure to beat them. Any goal without a specific date of achievement is not a goal. You are merely wishing. Sadly, this is what many people do. By specific, I don't mean saying you will make 'be a millionaire by August 2030'. Be more specific with the date. Rather, say 'August 30, 2030' for instance. Then it becomes a goal that you can wake up every morning and chase.

4. Spend after saving

Learn to live by this rule. For every dime you earn, save at least 10% of it. Now, this is the difficult part: Many people aren't disciplined enough to do this. The key to achieving this is to separate your business income from your personal finance.

5. Leverage on good debts and avoid bad debts

Everybody should like debt. This is a principle of the wealthiest people in the world. They like good debt and avoid bad debt. Good debt brings you more cash flow and if well-managed, sets you towards financial freedom. Bad debt, on the other hand, brings you unneeded luxuries, puts serious pressure on you and can make you miserable.


If you must boost your personal finance in 2022, try to avoid bad debts.Good debts are incurred towards fulfilling rewarding financial obligations like the purchase of businesses or real estate; these are things that will compound your financial interests over time and make you independent. Bad debts are taken out to buy non-essential luxuries such as cars, holiday trips and the best gadgets. These luxuries don't compound wealth. Rather, they take what you already have. Decide which one you want.


As human beings, we plan in our minds to make each year the best year of our lives. Yet, many people fall short of their expectations at the end of the year simply because their financial planning was not adequate or were too overwhelmed by circumstances around them that all their financial goals suddenly came to nought. While it is okay to plan, it is much better to know the deliberate actions to take at each point in time and to be taking such actions.

(The writer is the Founder of Money Mantra, a personal finance solutions firm.)


(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Published on: Sunday, January 09, 2022, 07:00 AM IST