5 tips to keep your financial resolutions on track.
The New Year is a great time to overhaul your life for the better, and one excellent place to start is by making solid financial resolutions that can help get you closer to your money goals, whether it’s increasing your retirement savings or setting enough money aside for a down payment on a house.
Here are our top 5 tips to get your finances in shape as you head into the new year.
Re-evaluate your goals
As you evaluate your goals, ensure that they are SMART: Specific, Measurable, Attainable, Relevant and Time-bound. If you haven’t reviewed your budget in detail to determine how much of your income you can and are prepared to set aside to address your debt situation, now is the time to do so. You’ll increase the odds of success if you strike a balance between paying off your debt in a reasonable period of time while maintaining a reasonable standard of living.
Stick to a monthly budget
Following a budget should be on everyone’s to-do list, particularly if you have bigger financial goals in sight. Building your budget is the easy part, but sticking with it is about creating and maintaining good habits. Create your budget with personal priorities and long-term goals in mind. Aiming to set aside 50% of your income for needs, 30% for wants and 20% for debt and savings is a good place to start. Sit down and review your progress every month. Make adjustments as needed. As an added incentive, budget a small reward every few months for sticking to your plan.
Save for an emergency fund
If you’re starting with nothing, every little bit counts. Target $100 as your first mini-goal. Once you’re there, take it up to $1,000, and continue until you have a month’s living expenses set aside. Once you’ve got a single month’s worth, focus on paying off any high-interest debt or getting closer to your retirement goals before focusing back on saving the next months’ worth of expenses.
Factor in saving up for fun stuff
We all want to save more, invest responsibly, knock out debt, and cut back on unnecessary expenses. However, when you approach financial resolutions with a mindset that you can’t spend or save up for anything fun, you may lose the inspiration to save at all.
To avoid this, try shifting your focus to the fun stuff. For example, think about where you want to travel or consider a luxury item you really want to buy. From here, you can start setting up savings goals to move you closer to your target.
Make money doing what you love
Most people can name at least one thing they are truly passionate about. One of the ways to enjoy your work is to only do the things you enjoy. Find a way to turn your passions and hobbies into profit. The world is full of amazing jobs such as full-time ice cream tasters and video game testers!
It may seem overwhelming to add something else onto your to-do list when you’re in the midst of making holiday lists, but budgeting for the new year now can save you heartache later. By getting a jump on your priorities and ending the year on a strong note, you’ll enter 2019 focused and ready to tackle your finances head-on.