Ever wondered why new year resolutions never work? Because without a plan, they are merely empty resolutions. And when it comes to financial resolutions and goals, planning becomes all the more important. The financial resolutions of most people boil down to three main goals – to clear the debts, spend less, and save more.
You may not have been able to accomplish these goals but not anymore – here are tips to get your financial resolutions back on track!
- Identify Your Goals And Have A Clear Understanding Of Them.
Every individual’s financial situation is different and hence, every individual’s financial aspirations are also bound to be different. It depends on many factors such as income, essential requirements at present, family situation, and so on. You need to carefully assess these personal factors keeping in mind the kind of picture you wish to build for yourself in the future – whether you wish to build a big, fat retirement fund, or whether you wish to buy that dream house in the suburbs, or you wish to pay off all your debts – it can be anything. And this is precisely what you need to identify. Also, when you do identify your financial goals, make it a point to separate your long-term and short-term goals.
- Chalk Out A Budget.
A well-planned budget is the foundation of successful financing. Spending money without a budget is like driving around in your car aimlessly – you only waste your energy and fuel without getting anywhere. A budget acts as a roadmap for all your monthly expenses while allowing you to eliminate all unnecessary and additional expenses. Furthermore, a budget allows you to prioritize your needs and separate them from your ‘desires’ (the prime cause for your credit card bill skyrocketing).
Creating a budget is easier than you think. All you have to do is to look at the amount of money that is coming in every month and figure out what are the things that you can’t do without in a particular month (these are the basic needs such as food, water, gas, electricity, etc.). After listing the most necessary items and services, you can build a budget for the fun things in your life like family outings, movie outings, or a fancy dinner maybe.
Note: Exclude all expenses that you DON’T need.
- Create An Emergency Fund.
Life is all about uncertainty. You never know what pickle you might get caught in the very next moment, but you sure can be prepared to face it! Keeping your savings aside, you should always maintain an emergency fund just in case you ever need it. It may be any kind of an emergency – an illness, a break in your job, your car breaking down, your house demanding a little repair here and there – anything. Having an emergency fund ready allows you to correct such situations without hurting your hard earned savings.
If you don’t have an emergency fund or backup plans life insurance/health insurance, you and your family might be forced to resort to using your credit card to the fullest which might eventually end up putting you in knee-deep debt. Needless to say, your financial goals will be hampered.
- Build A Nest Egg For Yourself.
When you see your future, you shouldn’t be shortsighted – you must be able to visualize the bigger picture in the long-run. You have to think about your life post-retirement and how can you keep yourself and your family afloat even then. To have a peaceful and financially secure life after retirement you have to start planning and saving now itself. Invest in savings plans like 401(k)s, IRAs, Roth IRAs, and other such beneficial retirement plans and make sure that you are setting aside a sufficient amount every month in these accounts. By the time you near your retirement, your investment plans will have ample time to grow, thereby, providing you with the much-needed security net during your golden days.
Think of your savings as building a nest egg for a safe and secure future.
- Track And Monitor Your Progress
While you continue to move one step up the ladder to reach your financial aspirations, you should also continually keep tracking your progress to see how your finances are looking. This will help you see whether or not your present approaches to reach your short-term financial goals are working to deliver desired results. As you begin to have a solid grasp of your finances, over time, you’ll see that it’s no longer very difficult to find ways to reach your long-term goals too.
Accomplishing your financial resolutions is a toughie and it needs a lot of patience, perseverance, dedication, and determination. However, make sure that in the process of planning and saving up for reaching your financial aspirations, you don’t put your life on hold. While saving money is great, you should also live and enjoy the ‘now’. And when you are able to do both simultaneously (enjoy your life and save money), you will know that your life, as well as your finances, are on the right track!
Hope this helps!
If you need expert help in helping chalk out the best financial strategy for you, MyTaxFiler is always at your service! Write to us at firstname.lastname@example.org or call us at 1-(888)-482-0279.