Are you looking to get your finances into shape for the New Year? Here are five New Year Resolutions that will help you to get into better shape – financially speaking.
1. Pay off your credit card debt and other personal loans
Credit card debt attracts a very high rate of interest which acts like an anchor on your personal finances. Get the credit card debts paid off and then quickly pay off other personal debts. You’ll feel a great relief knocking off each of these debts which will encourage you to be more positive with your savings.
2. Develop the habit of ‘Save First, Spend Later’
Easy said, but not easy done. The simplest way is to have a separate savings account that you deposit funds into each and every pay day. To maximise this good habit, you need ensure that you don’t spend more than what you have available after contributing to the savings accounts. This is the best way to both budget and save at the same time.
3. Set ambitious money saving goals
Carefully consider money saving goals that will add value to you and your family. Have a number of goals for the short, medium and long term. Make sure you review these goals and share them with family and close friends who can keep you accountable your goals. Don’t forget to read How To Set And Achieve Goals For Your Money – Three Step Guide. This will be a great help for prioritising and achieving your money goals.
4. Avoid the trap of impulsive spending behaviour
All your good work can easily be wasted by falling into bad spending habits. With so much marketing and sales hype it is easy to find yourself buying things you want as opposed to what you need.
The trick is to remain disciplined and this is more easily done by removing /reducing temptation. So avoid the big daily deals sites, reduce the limit on your credit cards, better still replace them with a debit card. Have your savings accounts separate to your everyday banking so that it is more difficult to withdraw funds and thereby give you the time to fully consider your purchase. For more support on this subject read Save Money by avoiding Impulse Buying (Part 1) and Save Money by avoiding Impulse Buying (Part 2)
5. Protect yourself, your family and your savings
Securing yourself against unexpected events is critical to your future financial success as sooner or later, we will fall on difficult times. Review your personal insurance program so your family are protected against sickness, injury and death. Get the house and home contents covered and make sure the car is fully insured.
Look to protect your savings against further investment market shocks similar to what we have just experienced with the global financial crisis. Ask yourself, “If the investment markets that I’m currently invested in fell by 30%, how would I survive? Implement an emergency fund that can be used to help you through the most difficult of times.
One last tip, never forget that much in life is out of your control so focus on what you can control. If you work at it you can control your spending and better position yourself against unexpected events.
We wish you the best of luck for your New Year Resolutions.
Looking for some more inspiration? See New Year Quotes – They Could Help You With Your New Year Resolutions