The new year is a perfect time to reflect on your achievements from the ending year and to plan for the new year.
While you can also make resolutions for other aspects of life, financial success should be at the top of your list.
Check if you achieved your last year’s financial resolutions and take any shortcomings as lessons to help you make better financial decisions this year.
Below are some top financial resolutions you should make this year.
1. Start Saving
Resolve to save a part of your monthly income if you have not been saving. To save, you must drop unnecessary spending and live within your means.
For example, you can avoid purchasing anything that catches your eye in the mall or online stores.
Try an automatic payment from your checking account to your savings account if you cannot control your spending habit.
2. Start Budgeting
Budgeting is a crucial financial skill that helps you build good financial habits. While the budgeting process may seem daunting if you have never tried it, it is simple once you start.
The number one role of creating a budget is to understand your financial situation. Once you understand what you earn, spend and save, you can adjust the numbers to achieve your financial goals.
3. Raise Your Credit Score
Your credit score is crucial because it determines your options whenever you need credit. Financial institutions may also use your credit score when determining the interest rates to charge.
Make this new year an opportunity to raise your credibility if you messed up before.
Some proven ways to improve your credit score include paying your debts and bills on time, minimising your expenditure and avoiding too many new credit cards.
4. Plan for Your Retirement
Don’t wait until your last year at work to start planning for your future. Determine the amount of money you need to retire and start saving now.
Also, start investing in low-risk investments that will give significant returns in the future, like the share market.
Now is the best time to build your know-how if you haven’t tried any investment.
5. Pay Your Debts
Servicing a debt for many years increases its cost. So, come up with ways to speed up your debt repayment this year, like increasing your principal payment.
Also, avoid taking debts you don’t need, like buying furniture on credit when you can pay cash.
No matter your success or failure in the previous year, you can significantly improve your financial situation this year if you set realistic financial goals. Remember to write down your resolutions and keep track of your progress.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.
This information does not take into account the objectives, financial situation or needs of any person. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.