New Year’s the time for new goals, new perspectives, new achievements in life. And primarily it begins with a healthy finance. Now we may take the financial resolution fairly seriously but like any other resolution, it may suffer the ‘I quit’ symptom. We resolve to get better about money matters, improve for a couple of weeks, or maybe even months, and then let those good habits lapse. Much of that colossal failure rate for New Year’s resolutions can be traced back to setting unrealistic goals and expectations.
You certainly don’t want to fall pray of it this year surely. So although you may have your resolutions set, here are a few reasonable solutions that will help you be on track. Follow them and make 2019 the year you turn things around.
Build an emergency fund, today
Boosting your cash reserves for emergency situation should take priority over all other financial goals in the coming year. Encountering a home repair, wrecking your car, an unexpected mishap, all can leave a hole in your pocket if you have to spend from your pre-decided budget. Also, if your savings account balance is above that threshold, that is if you don’t have a minimum of three months; worth of living expenses/salary tucked away in the bank, you’re running the risk of landing in debt.
Making an overnight emergency fund isn’t quite possible although you can start cutting down on your monthly expenses to contribute to an emergency fund. But this is crucial and you have to be determined to build out a solid emergency fund.
Unhealthy debt isn’t quite healthy for your finance
Outstanding credit card debt is bad news. This sort of debt not only costs more money through interest charges but also has the potential to bring down your credit score. If you’re saddled with debt, paying it off will save you from an unhealthy cycle where you’re adding to your outstanding tab by the day. All you have to do is review your outstanding obligations, identify those with the highest interest rates, and pay them off first.
Without any more delay. You might also look into transferring various balances to a single card with a lower interest rate. Of course, to chip away at that debt, you’ll need extra money, which you can get by cutting down on expenses (for few months) or perhaps try another hustle (turn your hobby into second income). A combination of both works even better.
Don’t derail your budget
You may have a budget ready and this may be your foremost financial resolution of the year. That’s great! But what may come in between is a good plan to live up to this resolution. Have a framework, that’s important. List your recurring monthly expenses, factor in one-time expenses (yearly subscription basically), and then compare your total spending to your post-tax income.
The figures you use should be rooted in reality, which means you’ll need to check your bank and credit card statements to get an accurate sense of what you spend across various categories! Once you have that framework in place, you’ll see where your money is going and where you have room to cut corners to put in money clearing your debt or keeping aside for emergency fund.
Get rid of big de-railers
You have a plan in hand, a framework ready but still it appears difficult for you to save more or look out for a healthy finance. The number one reason is lack of commitment. Feeling stressed at woryou indulge in ordering food, went for shopping – splurged on something they couldn’t afford,Continuing to pay for unused subscriptions, Paying too much in Friday night outs, buying something that you wouldn’t even use. All this come in between your healthy financial goals. Be little committed, do bit of mindset shifts, splurge less and you can avoid these roadblocks and achieve your financial resolutions!
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