7 Financial New Year Resolutions To Make Your Year A Success
It’s that time of the year again…
During the holiday season, the most searched-for how-to question on Google is “how to get rid of stress?” According to the American Psychological Association, 75 percent of people say they feel stressed about money some of the time, with 22 percent feeling “extreme stress about money.” It can be easy to dwell on past financial missteps, but the best way to cure that anxiety is to be proactive.
This New Year, take control and get rid of that stress by creating goals that will ensure that this year is your best financial year ever. Making resolutions–and sticking to them–can be hard, but if you’re realistic and honest with yourself you can develop a financial program destined for long-term success.
“Goals work much better when they’re realistic and specific,” Dean Karlan, a professor of economics at Yale University, advised. Need some help? Here are seven financial New Year resolutions that lead to sure-fire success in the new year.
Look At Last Year’s Spending
Take a look at all the money you earned this year. Where did it go? Did you spend your money on things you actually needed, or did you find yourself constantly going over your budget each month? Perhaps you are spending too much on going out or your phone bill is too high. Track your spending for an entire month and actually see where your money is really going. Once you are aware of your spending habits, you can begin to make adjustments and better decisions in the new year.
Make A Budget
Now that you’ve addressed your spending for last year, it’s time to make a budget for the new year. Be consciously aware of what your long and short-term financial goals are. If you want to prepare for retirement, go on a trip, or buy some new furniture this year, make a note of it. Take note of your essential and nonessential purchases, and then calculate what your average monthly expenditures are. This will help eliminate overspending. It’s easy to keep track of your money with a electronic payments card. It allows you to easily set limits and stick to them, making sure that you only spend what you planned to.
While all debt is not necessarily a bad thing (a mortgage, for instance, is useful), there’s absolutely no benefit to carrying a credit card balance and paying exorbitant interest rates. Pay off these balances as quickly as possible, focusing first on the higher-interest cards. If you find a credit card handy for making purchases, remember that a open-loop electronic payments card can be used anywhere that MasterCard® or Visa® is accepted, including online purchases or paying bills, but it uses your own money instead of credit, so you won’t go into debt. Unlike bank accounts, there are no overdraft fees, so you can avoid that debt too.
Start Working On Your Emergency Fund
To protect yourself against the unexpected – e.g. loss of employment, illness, family issues, having to find a new place to live – it’s important to have an easily accessible cash fund to cover your essential expenses. Typically, this amount should be at least three month’s worth of expenses. Don’t touch this money. If you’re looking for more ways to save, see above.
Improve Your Credit Score
Having a good credit score can save you thousands of dollars in the long run, and set you up for long-term financial flexibility. Make sure you always pay your credit cards on time, and try to pay off any high-interest debt as quickly as possible.
Invest For Retirement
Now, more than ever, it is important to put aside money for retirement. Use the New Year to go over your budget and your retirement plan and check if they are in sync. Ask your employer about an RRSP. Talk to your bank about investing. One great way to save for retirement is by using an electronic payment card. Thirty-four percent of millennials also think that using this card would help them save for retirement — and this number more than doubles among current users, with 75 percent believing that electronic payments cards will help with savings.
Share Your Plans!
Money isn’t something you should hide. Keep the dialogue open with your partner, your friends, and your family–the more you share your own financial success secrets, the more support you will get, and the better off those around you will be.