Looking forward to the new year, some of us like to make New Year’s Resolutions – some we keep, some we don’t, but how many of us make Financial New Year’s Resolutions? It might be something that you want to think about for 2019.
Resolve to do Better– we all start off the new year gung-ho about our New Year’s Resolutions then we get disheartened when we don’t see instant results, and we fall off the wagon. The solution is to start small and be happy with small results rather than expecting a major overnight change in your money situation. Resolve to manage your money better than you did last year.
Identify Your Financial Goals– before you can make any progress towards your goals you need to know what they are – repay your car loan? buy a new home? retire early? To increase your chance of success you need to be specific about your goals then outline a plan of attack. Look at your financial performance last year and be honest - did you overspend or overborrow? Reconsider your financial mistakes and resolve to do better in 2019 and it is important to continue to review your progress periodically throughout the year.
Get a Support System, your spouse should always be part of your team as you should be working together towards your financial goals. Taking a personal finance class together will help you recognise where you are damaging your finances. Share money saving ideas with family and friends.
Here are the Five Main Financial Goals that you should consider for the new year.
Start to Budget – Start tracking your spending because before you can commit to sticking to a budget you need to know exactly where your money is going, see where you are overspending and plan to reduce the cash leak in that area. Use Personal Finance software to help you to easily track your finances.
Get out of Debt – this is a key goal to taking control of your finances. Prioritize your debts – organize your debts by their interest rate, pay them off in order of the highest ones first. Fast track your debt payoff goals, instead of saying “I am going to pay off all my debts this year” which is a big goal, commit to contributing a little more to your monthly payments. An extra $50 a month can make a big difference. Think about ways of raising extra money to pay off debts maybe selling unwanted items or taking as second job.
Start Saving Money
- Reduce your grocery bill and stop eating out.
- Find ways to save on utilities, cut ties with cable and start streaming.
- Close any bank or credit accounts you don’t need, this could save you bank charges.
- Call your credit card company to try and negotiate a lower interest rate.
- Boost your retirement savings and set a monthly savings goal.
- Automate as many monthly payments as possible. In this way you make payments without thinking about it, so it becomes a habit to expect these deductions from your bank account each month.
- Commit to no-spend days or weekends. Make this a time when no money at all leaves your bank account, eat at home, find free entertainment and skip shopping.
- Get healthy without joining a gym – try doing on-line exercise videos for free and get outside for walks and hikes.
- Collect your change – try and use cash to pay for things and keep your change. Throw it into a jar. It is amazing how much you can accumulate over a year, and this money can go towards paying off a debt.
Learn about Money and Finances - Subscribe to a financial podcast (Randall does one every Friday at 11am). Increase your financial knowledge by listening to the experts. Alternatively commit to reading at least one personal finance book this year (there are lots to choose from at your local library for free!)
Learn about investing or re-evaluate your investment portfolio – sit down with your financial advisor to see if your current plan is meeting your goals or if you need to make changes. Make it a goal to invest a certain amount each month.
Some great ideas to get you started on the road to financial recovery, good luck in 2019.