Planning Your Financial New Years Resolutions
As we begin to enter the festive month of December, we’re slowly becoming faced with the task of developing our New Year’s resolutions. For most people, deciding on a New Year’s resolution can be a challenge. Usually, they consist of something along the lines of exercising, becoming more organised or losing weight. But, for many others, financial health is also a contestant. From decreasing your spending to increasing your credit score, there are endless options to choose from. In fact, research suggests that, half (49%) of people hold regrets about the way they organised their finances. So, perhaps this annual event is exactly what you need to kickstart your healthier financial journey and find the financial freedom you’ve been searching for. Before diving in and creating your New Year’s resolutions on the spot, there are numerous aspects you need to consider. Here are a few examples to get you started…
Your Current Financial Situation
Your current financial habits have a massive impact on your relationship with money. Those who have mastered the idea of budgeting and efficient spending will find it much easier to find the balance between paying their bills and spending without any worry. On the other hand, those who are unaware of how to save and spend wisely may find themselves struggling more than the opposition. So, before moving forward and automatically expecting change as soon as the 1st of January hits, you should now be taking the time to review your current financial situation and identify aspects like your downfalls, strong points, and things that desperately need working on. This way, after covering all these elements, you will have a clear plan of what is going to happen next and how you can create a better financial relationship.
What Are Some Of The Common New Year’s Resolutions?
Your financial goals will often differ from those of your family and friends, so, your goals should, too. However, if you’re unsure where to start or what to work on, here are a few ideas that are commonly chosen.
1. Building an emergency fund: If you are faced with a financial emergency, the last thing you can turn to is a short term loan. However, these carry their own financial risks that should be a last resort whenever possible. In order to steer clear, we advise you to begin building an emergency fund, as this will enable you to increase your financial stability and could even decrease the amount of stress and strain caused by money.
2. Tracking your expenses: There is nothing more confusing than wondering where your money is disappearing, especially if you’re someone with a poor memory. You may often find yourself wondering what transactions you made a few weeks ago. Monitoring your spending will help to solve this issue. This technique allows you to stay aware of the transactions you make, and may also help you learn about your spending habits in order to cut back in the future.
3. Cutting down on spending: Overspending is a big downfall for many people around the world. It doesn’t only interfere with your budget, but it can also land you in an unwanted pile of debt if you’re not careful. As a result, many people make a New Year’s resolution to reduce their spending in order to change and fix their unhealthy habits.
It Takes Time
New Year’s resolutions have their specific name for a reason; nothing happens overnight, especially when it is in regard to your personal finances. The idea of a New Year’s resolution is to take your time and steadily improve yourself, your surroundings and those things which matter the most. So, if your financial improvements are taking longer than you originally expected, don’t worry, you’ll fix the problem eventually.