For many people, this year 2022 has been quite difficult. Inflation has reached new highs, and interest rates have followed, making purchasing and borrowing more expensive and difficult. so If you’re someone who likes to make resolutions on New Year’s Day, Here are ten resolutions that can help increase your financial fitness and hopefully inspire you to stay committed to them in the new year.
1. Create a budget
If you persist in saving and investing during your working years, your net worth should increase over time, enabling you to accomplish many of life’s most significant objectives. You may design your road map and keep on track by making your own budget and net worth statement.
- Pay yourself first
- Calculate your personal net worth annually
- Project the cost of essential big-ticket items
- Retired? Invest your living-expense money conservatively.
- Prepare for emergencies
2. Examine Last Year’s Financial Mistakes and Victories
You can’t plan for the future if you don’t look at your past. Go through your bank and credit card statements and see where you’re currently sitting. What financial mistakes did you make last year? What did you succeed in?
3.List Your Financial Goals
Once you’ve taken a look at your past financial mistakes and victories, make a list of your financial goals for this New Year. They can be overarching, big goals or smaller, specific goals. Whatever you wish to achieve, jot them down somewhere you can see them every day.
4.Manage your debt
Debt is only a tool; depending on how you utilise it, it may be either helpful or negative. For the majority of people, having some debt is a practical need, especially when buying a costly long-term asset that would require time to repay, like a home. Problems start, though, when debt starts to act more like a burden than a tool. Here’s how to maintain discipline.
- Keep your total debt load manageable
- Eliminate high-cost, non-deductible consumer debt
- Match repayment terms to your time horizons.
5. Optimize your portfolio
We all share the goal of getting better investment results. But research shows timing of markets is difficult and can be counter-productive. So create a plan that will help you stay disciplined in all kinds of markets. Follow your plan and adjust it as needed. Here are ideas to help you stay focused on your goals.
- Focus first and foremost on your overall investment mix.
- Diversify across and within asset classes
- Consider taxes.
- Monitor and rebalance your portfolio as needed.
- Choose appropriate benchmarks
6.Change Your Spending Habits
Once you know how much of your money will be going to each category, think about how you spend your money on any given day. Do you buy coffee each morning? Go out for lunch once a week? Pay for services you never use? Assess your spending habits and then commit to changing at least one of these habits to save you money.
7. Pay Fast, Buy Slow
The basic concept of “pay fast and buy slow” will help you keep on top of your finances. In order to prevent late fines and to better understand how much money you have left over, pay your invoices as soon as they are received. And practise slower spending to reduce impulsive purchases and foster reasonable thought. This can be accomplished by setting up a “pause” period between the time you first consider buying something and the actual time you buy it.
8.Prepare for the unexpected
Life involves risk, particularly in the areas of investing and finance. Unexpected events like illness, job loss, disability, death, natural disasters, or lawsuits can completely change your financial situation. Make a resolution to get your insurance needs met if you don’t have enough funds to adequately protect yourself against significant hazards. Unexpected incidents, which happen seldom but are expensive to handle on your own when they do, are protected against with insurance. You can be better prepared for life’s unexpected occasions by following the tips below.
- Protect against large medical expenses with health insurance.
- Purchase life insurance if you have dependents or other obligations.
- Protect your earning power with long-term disability insurance.
- Protect your physical assets with property-casualty insurance.
- Create a disaster plan for your safety and peace of mind
9.Pay Off Your Credit Card Balance in Full
If you can’t pay off your balance in full, at least aim to pay off more than the minimum payment. Ensure you have the money in your bank account before making purchases on your credit card. This will help you break the never-ending cycle of working to pay off your credit card while you add more purchases onto it.
10.Take a Financial Literacy Course
Expanding your financial literacy is one of the best investments you can make for yourself this year. Learning more about money management, debt, credit, budgeting, retirement, etc. will not only help you now but for years to come. A great way to start is by picking up a personal finance book from your local library or educating yourself through our useful financial education classes.
Happy New Year, everyone! Let’s make the most of these next 12 months and invest in ourselves!
Enjoy!!!