5 financial resolutions for 2018 to improve your savings
The festive month has gone by, and it’s time for you to look ahead. Typically, the New Year begins with people putting down things they wish to accomplish on their list of New Year resolutions. From exercising regularly, cutting down on junk food, ticking off places on their travel bucket list to saving and investing more, there is a long list of resolutions that people make. But, more often than not, they fail to achieve them. But, that doesn’t mean we lose hope and stop making them.
So, how do you make sure you stick to it? After all, everyone wants to live a healthier life and make sure they have a financially secure future. The key is to make specific, measurable, and achievable goals. Once done, you should regularly track them to make sure you are on the right path. With this in mind, here are some financial resolutions for 2018 that will ensure you are on the path to a healthy and wealthy life.
1. Start with savings
Many people take a specific number and decide to save exactly that amount for the year. While there’s nothing wrong with it, you need to set a realistic figure and make sure you will be able to take the steps required to save that amount at the end of the year. This can get difficult. Instead of year-end goals set up monthly goals. Start by looking at your income, and the fixed and variable expenses. Figure out a budget and set a realistic amount you wish to save each month. It’s okay to have a small figure unless it is achievable. Setting a goal, which you may fail to achieve, will only demotivate you. One of the ways to do this is to set a small percentage of your monthly income as savings. This is much easier to track, as well as achieve. Once done, set up a tracking system. Put up your budget on an excel sheet or use an app to monitor monthly income and expenses.
2. Use technology to handle your financial commitments
Once you set up a budget, you will identify various expenses that need to be monitored and fulfilled otherwise you may have troubles with your personal financial management. You will also have to allocate some money for emergency savings, retirement fund, investments, etc. Doing this manually can be taxing. Utilise technology to your advantage and make things easy for yourself. Use online apps and websites to automate your bill payments and investments. This will reduce overspending. You also save enough and have a good credit rating. Technology will reduce the stress and free you up for taking meaningful financial decisions in the long run.
3. Get rid of you debts
Debts are the biggest obstacles to achieving financial freedom. There’s nothing wrong with taking a loan. But, you must have a mechanism in place to ensure it does not stop you from enjoying financial security in the long run. Thus, clearing your debts should be a priority. There are two ways to clear your debts quickly. One is the debt avalanche method and the other is the debt snowball method. For the debt snowball method, list down debts from the smallest to the largest amount. Pay the minimum amount, clear the smallest one, and move on to the next in the list. For the debt avalanche method, list down your debts based on their interest rate – from the highest to the lowest. Start by clearing the debt with the highest interest rate and keep moving. Use any of these methods to effectively rid yourself of debts.
4. Incorporate healthy lifestyle changes
The way you lead your life can impact your financial status. Regular breakfast takeaways, frequent dinners at plush restaurants, unhealthy snacking, no exercising, taking expensive cab rides regularly, pricey mobile and internet plans that is actually not useful for you, and many such things can negatively impact your finances. Plus, it can also lead to hefty medical bills. This New Year, cut down on unnecessary expenses and lead a healthy life for a better future – health wise and financially. Take up public transport, cook your own breakfast and take homemade food for lunch, pick a hobby or follow a workout regimen. When you indulge in healthy activities, you tend to feel better, be more productive, earn well, and reduce the burden on your pockets.
5. Start investing and get insurance coverage
Investing is a good financial habit that is often overlooked by young, old, and even educated folks. But, the earlier you start investing, the greater your chances of achieving financial independence sooner. If you are a beginner, consult a trusted advisor and start investing regularly. In addition to this, take up the necessary insurance coverage. Whether you live on rent or own a home, you must consider renters or home insurance to safeguard yourself from unfortunate expenses. Health insurance is another important coverage you need to consider. Evaluate each plan in detail in relation to your lifestyle and pick the one that is best suited to you. If you live with your family or you are the only breadwinner, then also consider life insurance cover.
The New Year comes with the opportunity to rectify past mistakes and embrace new opportunities to better your life. Taking up these financial resolutions for 2018 will help you get on a path to build a financially steady future for yourself and your loved ones.
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