Top 10 Financial Resolutions for New Year 2018
It’s that time of the year again, the time when we overhaul our life for the better, or at least try to. The New Year is also the perfect time to reassess your finances and start making solid financial resolutions that can help you attain your goals, whether it’s saving enough money for a down payment on a car or increasing your savings.
Before you read on, here’s something to ponder on: you don’t have to keep as many resolutions as you can; it’s not a game. What’s important is setting yourself some attainable financial goals and being able to stick to it. If you can keep even just one financial goal, you will be able to get results.
GoBear has prepared the top financial resolutions you might want to add to your list this 2018.
Assess your financial situation
The first step in making changes is to assess your finances. Do you have enough savings to cover emergency situations? Are you currently in debt? Are you able to regularly contribute to your savings? If you’re financially on track, good. Keep that positive momentum. If not, you may want to start setting a personal budget. As tedious as it may sound, setting a budget can increase your savings or pay down remaining balances on your debt.
Start with your after-tax income. With the new tax reform commencing this January, it’s essential to make an adjustment and determine how much you’re taking home each payday after taxes and other deductions.
Set a financial goal
People tend to come up with financial goals every year, but they’re hardly actionable. Having a clear and concise goal for the year is important. Instead of just saying, “I want more money in the bank.” Make a financial resolution that you can actually achieve, like, “I want to have more than P50,000 in my savings account by the end of the first quarter.”
Get a separate savings account and set an amount you want to save. A good amount to start with is 10% of what you’re earning. You can increase it as your salary also increases over time. When it’s payday, take a portion of your salary and deposit it into your savings account.
Plan your impulse buys
Sale, sale, sale! It’s written everywhere and in every corner of the mall at all months of the year. Seat sales also tend to make you book flights impulsively. We often get tricked by this four-letter word written on red banners, thinking that we get to save by buying things at discounted prices. Let’s be real; we can’t really stay away from impulsive buying. The good news is that there’s a trick to managing it! The best way to take advantage of these kinds of purchases is to plan them. (hashtag: happykiddo!)
Set a budget on how much you are willing to spend for leisure. Plan where you want to spend your money within set time frames. This way, whenever you want to go to a bazaar or take advantage of a seat sale, you’ll be able to assess if it fits the plan you made for the year.
Keep track of your spending
Always monitor your spending and make sure that your money is going where you really want it to go. This gives you a good opportunity to identify where you can cut your spending and where you can save.
Forget pen and paper; there are applications on the Google Play Store or Apple App Store that can help you keep track of your spending. Since people tend to fiddle with their smartphones a lot, you can easily spend a few minutes to create a budget plan and monitor where your money goes.
Get an automated savings plan
During payday, the idea is to withdraw your money and deposit it into your savings account. The thing is, almost everybody is thinking the same thing, so you may have to wait in line. This could be frustrating and time-consuming. Luckily, there’s a way to skip long lines and manually depositing your money; this is where an automated savings plan comes in.
Create an online account for your savings so you can set up an automated savings plan. If you don’t know how to do it, you can go to your nearest bank branch to ask for assistance.
Use your credit card wisely
If you’ve been going trigger-happy on your credit card this year, it’s time to put a stop to your bad spending habit and leave it behind because that’s so 2017.
When you monitor your credit card spend, you also avoid making unnecessary purchases. You also shouldn’t substitute your credit card for cash, that’s why you have a debit card. If you have an ATM savings account, your ATM card also acts as a debit card.
Pay off your debt
Not all debt is bad. However, there’s nothing good about carrying a credit balance either. If you’re having a hard time getting out of debt, systematically pay your balances until they’re all settled. Once you’re back on track, resolve to make a purchase only when you can pay for it in full each month.
When settling debts, pay off the one with the highest balance first and move on to the next highest one until all debts are paid. Pay more than the minimum amount each month if you can. This way, you’ll be able to clear your debt faster.
An efficient way to realize the value of money is to give it away. When you have money, it’s easy to splurge on luxuries, but when you give, that money can powerfully influence someone else in a way that we’re often not aware of.
The next time you get your paycheck, walk into a Jollibee or McDonald’s and anonymously pay for someone else’s order. If you pass a child outside a fastfood chain staring at the people eating, buy food for them. In both cases, the recipients will probably remember this small act of kindness for the rest of their lives. You’ll realize how a simple P100 bill, in the right hands, can be a powerful and effective tool to change a person’s life.
Build an emergency fund
If you don’t have an emergency fund yet, it’s time to start one. This gives you a cushion during emergency situations, whether it’s illness or loss of a job. Keep enough cash stowed safely until the need arises so you’ll be able to protect yourself when the times comes.
Your emergency fund should be deposited into a separate savings account. Instead of putting it in your wallet, store it in your room where you won’t always see it. It takes discipline for you to promise yourself you won’t touch this money.
Read more about finance and how to manage it
To get in good financial shape, you’ll need to learn more about the subject. Whether it’s about general personal finance or a more specific topic, reading a book about personal finance can help you get closer to your financial goal.
This is all up to you; you have all the time to read at your own pace. Create a schedule wherein you’re required read at least ten pages or use your free time to read the book in one sitting. What’s important is the lessons you learn and then fit into your habits to improve your financial lifestyle.
A New Year’s resolution is a continuous process of small actions toward a big change. The change does not happen overnight. If you want to get your financial status into better shape, start off by sticking to these financial resolutions. With enough effort and a bit of determination, you’ll be able to take baby steps toward your financial goal for 2018. The most important thing is that you start now and keep moving forward.