New Years and Resolutions. What are yours?
The first month of the year always brings with it the promise of new beginnings and the burden of self-improvement. Fitness and financial-themed resolutions are among the most popular. Unfortunately, very few are successful in their endeavours.
What if you could choose them right and use the right tools? You would make a positive difference in your finances. The question is, are you ready?
1. Know what you want
Have a clear, concise financial goal for the year. You should write down a financial resolution that is clear and attainable like, “I will work towards reducing my credit card balance to nil and will accumulate over Rs. XXX in my account.
2. Prioritize your debts
Understand that all debt is not equal. Those with the highest rates (most likely your credit card outstanding) should be paid off immediately. In a lot of cases, the wisest course of action is to sell any certificate of deposits, savings bonds or other cash holdings and use them to pay the balance. Why, because you would actually save yourself money, by making a resolution to pay the debt!
3. Enroll in a systematic investment plan
If you have made a financial resolution to save, using systematic investment plan will force you to follow through because the cash is drawn directly from your bank before you can get your hands on it.
4. Close unnecessary accounts
Banks and financial institutions charge fees for everything. Is it really necessary to have several credit or savings accounts? Although there are exceptions, in the vast majority of cases the answer is a firm no.
5. Give money
One of the most effective ways to realize the value of money is to give it. The next time you get your pay cheque, take 5% of your salary and give it to those in need. The recipients are sure to remember your kindness for years to come. Suddenly, you realize just how much promise 5% of your salary contains.
6. Build an emergency fund
You are merely tempting fate and putting yourself at risk of a financial catastrophe if you have not set aside an emergency fund. Building a monetary back-up should be number one in the list of your priorities.
7. Improve your credit score:
Your credit standings impact your insurance premiums, for example, your ability to buy a car in addition to the loans you're eligible for. You can improve your score by maintaining an open credit card account in good standing. This is reported as positive information to the major credit bureaus every month, building your credit profile or helping to devalue mistakes of the past.
Whether you decide to take on just one of these resolutions, a few of them, or all, it’s time to commit to making 2017 a year of better finances. Through saving more, getting out of debt, and by smart spending, you can be relieved of the burden of financial difficulties and get closer to your goals. So why would you not do that?