At last! We have stepped into the new year. It's the perfect time for giving shape to your financial resolutions for 2018. A good financial resolution can be anything from paying off your debts to increasing your contributions towards your retirement saving plans. It should bring positive changes in your financial life and help you achieve your money goals in the next year.
While exact financial resolutions may vary between people, setting the below-given resolutions can help everyone lead a prosperous 2018.
1. Pay off your debts:
Do you have debts from 2017? If so, then make sure you pay it off in 2018. Think about the ways to clear your debt. Get a side hustle to inflate your monthly income and pay off debts. You can negotiate with your creditors to lower your outstanding balance. Or, you can take advantage a debt settlement or a consolidation program to get rid of debts.
2. Stay out of debt:
Avoid debts in 2018. Don’t make impulsive purchases. Charge less on your credit cards. Pay your credit card bills and mortgage on time to avoid late fees and penalties. Don’t borrow payday loans since they will push you towards debt.
Debts reduce your savings. Apart from that, compounding interests, late fees, and penalties stop you from growing your money. You’re effectively spending a part of your salary to pay off your debts instead of investing it. Smart investments can help you double your money in a brief span of time.
3. Make a monthly budget:
Budget may seem to be unnecessary when you’re on a strong financial boat but if you don’t track your expenses, you can’t know where you have to cut down your spending. Create a budget and stick to it for minimum 3 months. Check your performance. Have you saved any amount? Did you cross your budget in the last 3 months? Is the budget too tight for you? If so, revise your household budget. Don’t aim for absolute perfection right now. Try for a gradual improvement.
4. Build your nest egg:
Your present action determines your future. If you relax and spend your entire monthly income, your future is doomed. 71% of Americans haven’t saved enough money for their retirement years. Don’t be any of them since that is not good for your future. Make an automatic contribution to your retirement savings accounts. Take advantage of the employer match if you haven’t done it in 2017.
Tax-deferred retirement saving accounts are one of the best ways to save for the golden years of your life because they give you a chance to control your tax liabilities now while accumulating assets for the future.
The rule of thumb is you need to save 15 times your present wage to lead a comfortable retirement life.
5. Meet a financial planner:
Sometimes, it’s wise to consult a financial planner since he can help you know the ways to achieve your financial goals and resolutions. Don’t worry about the fee since the financial planner won’t charge you a lot. The financial advisor will act as a coach. He will tell you the strategies to build wealth gradually. Just make sure you choose a financial advisor who is experienced and certified.
How to stick to your financial resolutions in 2018
The biggest problem with any New Year’s financial resolution is sticking to it. Here are a few steps to solve this problem.
i Break down your financial resolution:
Sometimes, financial resolution seems unattainable since they are too big projects. The best way to complete this project is to break down it into actionable steps. For instance, if your financial resolution is to pay off credit card debt, then break down it into 3 actionable steps:
- Get a free financial counseling from OVLG
- Know your debt relief options
- Join a debt repayment plan
ii Talk to your buddy about being accountable:
Discuss your financial resolutions with your best friend. You’re trying to bring a positive change in your life. You need to talk about the steps you’re taking for shifting to a healthier financial diet. Your friend can give you helpful suggestions for improving your financial life. He can motivate you when you’re down. He can even encourage you to work harder for achieving your financial goals.
iii Make everything automated:
Automatic bill payment system is the best way to pay your bills every month. There is no scope for forgetting your deadlines. Rather you can discounts on services for automatically drafting money.
Get organized, financially and emotionally. Statistics say that only 8% of Americans keep their New Year’s resolutions. But if you can set a simple and specific financial resolution, then there are higher chances of achieving it. The keyword here is the word ‘specific’. Tell yourself that you have to save $4500 in your retirement account instead of thinking you should save more. Make a promise to pay off $3500 of your credit card debt by June 2018. The more specific you’re, the higher your chances of achieving your financial resolutions.