18 Tips to Help You with 2016’s Financial Resolutions
With the year ending, it is time to make resolutions for the New Year. You make many resolutions to manage your finances in a better way as New Year brings excitement to make a fresh start. However, after the first week, you might find yourself struggling with those resolutions especially if they involve long-term care. This may make you feel guilty. So how do you make a resolution you can stick to and keep you guilt-free? Follow these easy tips below to help you stick to your financial goals in the coming New Year.
- Know Your Financial Goals
Without a goal, you will not know where you will be reaching. Thus, it is advisable to have a goal first and then start to work to achieve it. This goal may be planning for your retirement, long-term savings, investing in life insurance, etc. You can formulate strategies to achieve a goal only if you know the objective.
- Stick to One or Two Resolutions
With one or two resolutions, you’ll be able to focus in a better way. The chances of not breaking the resolutions will increase if you stick to lesser resolutions.
- Think Ahead
Don’t make the resolution on New Year’s Eve. Take some time out of your busy schedules to think about your goals. This way you won’t end up making unrealistic resolutions.
- Don’t Follow Others
People may have some generic goals, but you must customize your resolution to suit your needs. Don’t just blindly follow others and take a moment to think about what you really want in your life whether it may be long term savings or getting insurance.
- Create Sub-goals
Make sub-goals of your primary goal so that you can easily map out the steps to achieve it. Further, you will also be able to measure it and see if you’re on the right track.
- Find Ways To Save
Saving may not be easy if you’re not accustomed to it. It can be a long process to learn to save if you don’t have much experience. Look for discount coupons, store sales, referral bonuses, and other such small things that can help you spend less.
- Get Advice
Inform your family and friends about your goals. They can help you in your journey to achieve your goals. Also, you can also seek advice from your financial advisor about your goals such as life insurance savings, retirement plans, etc.
- Make A Budget
Making a budget will help you in keeping track of your income and expenses. Doing it on a regular basis can help you in comparison over a period and in identifying overspending.
- Pay-off Smaller Debts First
Small debts should be paid off as early as possible. By doing so, you are freeing up money that you can subsequently use to pay off other large debts or to save for emergency funds. However, you must be careful not to spend the money you saved.
- Make an Extra Payment Towards Your Mortgage
Making an extra payment towards your mortgage will not only reduce the time to pay off for your home but will also lessen the amount of interest that you have to pay to the banks. Before you make an extra mortgage payment, make sure you don’t have any debt with a higher interest. If that is the case, pay the debt with higher interest rate first before making payment for an extra mortgage.
- Set Up An Emergency Fund
You can’t know what tomorrow holds for you, so it is always a good idea to set up an emergency fund. Though experts recommend having $500 in your bank account, you might be willing to have more as $500 may not be enough, especially if you lose your job. Even a salary of a couple of months can be used up quickly. Keep an adequate amount of funds you feel would be required in case of contingencies.
- Don’t Think It’s Too Late To Save
Financial advisors recommend having a particular amount of savings at a particular age. If you’ve not met the goals, there’s no need to panic. Don’t think it’s too late to start saving for your retirement, and these savings will ultimately help your dependence on Social Security.
- Be Aware of Your Investments
Many people are not aware of how the investments they hold are performing. Though people know what stocks they hold or how much they contribute to the retirement plan, you should take more steps to keep track of where the money is invested, the credit costs per year, the calculation of Social Security benefits, etc.
- Avoid Repeating Resolutions
Don’t make resolutions you took in the past and were not able to stick to it. This will only add up to your frustration and disappointment. Make fresh resolutions that would look forward to keeping.
- Keep a Checklist
Maintain a checklist of all the goals, sub-goals, and update it regularly to remind you of incomplete things. This can keep you focused towards achieving your targets.
- Reward Yourself
Give yourself a small reward each time you achieve a sub-goal. This will keep you motivated to keep moving forward. Also, it will give a feeling of progressing towards your ultimate objective.
- Maintain Records
It is advisable to maintain records that will help will you track your progress. You can keep a written journal, spreadsheet, or a notice board with graphs and charts. This way, you can easily get to know your current position and what changes you would require in your strategy to reach your goals.
- Be Prepared To Fail
There are always some changes of failure, and you must learn to accept it. Rather than getting disappointed, learn from it and treat it as a stepping stone to reach your destination.
You can follow these easy tips regardless you having any other source of income or not. Don’t think it will be too late to start saving for your financial goals.