It’s time to say good bye to the year 2016 and ready for one more year ahead with new challenges and opportunities. It’s that time again – the time to reassess your do’s and don’ts for the next year more specifically setting up new resolutions for the coming year, although staying fit and healthy is often the top New Year’s resolutions people make but people who commit to making financial resolutions every year and stick to them have better financial wellness. The New Year is just around the corner and with it, a chance to review our finances and make a commitment to have a best financial year this time.
So, if you are hunting for ways to have better financial portfolio for the coming year, here are some resolutions that you can adopt for 2017
1. Assess your current situation
Before making those long budget lists and big commitments, the first and foremost doing is to know what you own and what you owe to find out if you’re in the red or black zone. This is the first step in making positive changes. Get those net worth statements from previous years, review and compare them to understand your current financial status and decide where to make changes for improvement.
2. Analyze your last year’s spending
Once you know how much you have in your pocket, now it’s time to check those bills and withdrawal receipts of last year to get idea of your spending, where you are putting all your money and is it worth spending there or not. Try to make spending decisions in the context of your goals and re-prioritize your spending for basic needs firsts and then for those luxurious wants, keeping an awareness pattern will help you make better decisions throughout the year.
3. Square off your debts
Those high interest debts eaten up a big part of your income, whether you have credit card debt or any other kind of debt, a large part of your income goes towards repaying the interest component of the debt. Therefore, the longer your debt continues, the more interest you will end up paying. Try to pay your creditors in cash to cut down those interests and clear out all your debts.
4. Make a realistic budget for 2017 and stick to it
Now you have idea about your last year’s spendings and all your debts are cleared , its time to make a fresh start for next year with a new realistic budget to that you can stick to. Yes we all make budgets before every spending but end’s up with spending more. Learning to stick a budget can be little hard at first, it’s not something that comes naturally to most people. But when you know different aspects of budget planning, how you can get sidetracked from your plan and how to deal with them, you’ll succeed with sticking to your budget.
5. Cut down those unnecessary expenses
It’s easy to be lured by those attractive offers at online portals, shopping malls and restaurants and ending up buying things that you don’t need. This can be result as biggest culprit to impede your financial goals. So try to cut down on impulsive shopping and unnecessary spendings. Instead save money for emergencies and financial crisis.
6. Boost your Income
Although you can restrict your luxury wants and eliminate those unnecessary expenses but still in this modern era to fulfill your basic needs only, you required good amount of money and for that you need to find ways to boost your income to improve your financial well-being. Whether a side business, a freelancing job or taking a calculated risk by investing in an asset that generates income like real estate.
7. Save for your future
There is an old saying as “Money saved is money earned’. To ensure better future in terms of financial security get into the habit of saving. Save money every month by cutting down those unwanted expenses, open a separate savings bank account and leave it untouched.
8. Build an emergency fund
Emergencies such as illness, accidents, expensive repairs and other unforeseen expenses often comes unannounced. Finding the money to pay for them can be difficult. Therefore an emergency fund is your first line of defense against financial hardship. Without it you are overly exposed to financial risk. To create a substantial emergency fund, ensure that you retain some amount from your salary each time for your emergency fund, and keep this fund worth up to three to four months of your monthly salary.
9. Invest wisely
While it’s important to invest but don’t invest randomly, especially in assets which you don’t understand. Don’t fell prey to those unscrupulous investment schemes. You could consider about learning stocks and bonds and invest in them after complete analysis similarly investing in real estates is also widely considered as a safe bet by investors.
10. Get it on the record
Yes it is most important of all, whatever is on your resolution list, be sure to write it down. Writing it down and reviewing it often, rather than just keeping the list in your mind, helps keep you awaken and resolve from fading. Because It’s not important how many resolutions you make, important is how many you’re actually able to keep.