The beginning of a new year is a great time to renew your finances for the better. Making strong financial resolutions could help you get closer to your money goals. Be it retirement savings, setting enough funds for a down payment for a new house, vacations or improving your financial lifestyle, you need to have financial resolutions that you can to keep.
Be it personal finance or money management, there are effective methods to keep your finance on track. Here are a few financial resolutions for 2019 that you can keep.
Identify Your Financial Goals:
Before you begin your list of financial goals, have a clear and concise approach, also, identify financial goals for the year. Ask yourself these questions. Are you buying a home? Repay your credit card balance? Are you hoping to complete a degree? To increase your chance of success, you need to be specific about your financial resolutions, consider your outlook, then plan how you’ll achieve the same with a solid plan of attack.
By scrutinising your financial goals, keeping your financial resolutions becomes a lot easier to execute and also much more actionable.
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Try a Personal Finance App:
Everyone is looking to save and budget better, and technology has leapt ahead with several finance apps and tools that lend a helping hand. To get a grip on your financial resolutions, these mobile finance apps can aid you in keeping them. Be it personal finance, money management or bank balance check, these apps are at their forefront to help you save you money.
You can look into using personal finance apps like BankBazaar, here’s what you can do with this app:
- Check your bank balance on multiple bank accounts
- Track all of your financial transactions automatically, no manual actions needed!
- See where your money goes, prepare a budget accordingly
- Check your credit card limit, total outstanding balance and track your credit card spends as well
- And most importantly, get reminders on your credit card bills and loan EMI payments
- Get latest financial news and tips, helps you make the right financial decisions
- Thinking of applying for a loan or credit card? Check your free credit score report – anytime, anywhere!
- Calculate all loan EMI calculations with the EMI calculator
- And much more!
This app is a financial goodie bag filled with all the money management tools!
Priorities Your Debt Payoff Goals:
Not all debt or loans are equal. Make a list of your liabilities and priorities those which have the highest interest rate. Debt such as a credit balance should be paid off immediately. Investing money while you’re paying high interest on your credit card, does no good. In many cases, it’s advisable to sell any deposit certificates or saving bonds, and utilize them to pay off the credit card balance in full or partially.
Also, contribute extra, apart from what you’re already paying toward debt, from your monthly income, it gives you the leverage over debts and reduces that extra interest you’re paying.
Paying off your debt is one of the most effective ways to increase your overall sense of well-being. While this might let you spend less and save towards paying off the debt, it may make you happier and can give you a psychological boost.
Another way to consider paying off your debt is utilizing the snowball or the avalanche method. While the snowball method is when you pay off the lowest balance first – it can give you a psychological boost early on, the avalanche method is to pay off your highest interest first. The avalanche method is considered as the most financially efficient as the extra payment goes towards the loan with the highest interest rate.
Try a Monthly Savings Challenge:
Every little money that’s saved is that much money saved! Saving our hard earned money might not come easily to us; however, by setting up a monthly savings challenge, gives you a sense of prioritizing your income. You might consider the 52-week savings challenge. How does it work? You’ll begin saving with a specific amount. Every week, you double the amount which will lead to a snowball effect. By the end of the 52nd week, you would’ve saved enough money to either pay off your debt completely or partially or use it for an important expenditure.
Spend Less, Save More:
With a balanced food diet, your health is in better shape. Likewise, a balanced cash diet helps shape up your financial status. Limit yourself to a certain amount of money that you spend every week and see if you can live off the money that you’ve kept aside. All that’s on offer in our consumerism world such as gadgets, vehicles, luxury holidays, etc. it’s easy to be overwhelmed and you end up spending more than you saved for the month. This is when you end up becoming a financial wreck. By taking a more disciplined approach and controlling your expenditure, often leads to a surplus which can either be utilized to pay off your debt or save for your retirement plan.
Maintain a Good Credit Score:
Make sure to check your credit score on a regular basis and take steps to rectify any negative aspects. A poor credit score could affect the amount you are able to save, as it could lead to higher interest rates on loans, which in turn, reduces your disposable income. A good credit score lets you enjoy a good lifestyle. If you do have a good credit score, try to maintain it, and if required, try to increase them. One way you can increase your credit score is to increase the credit limit of your credit card but make sure you don’t utilize the new increase in credit limit as this could result in higher debt. Other methods include paying off debts, avoid another credit card, also, don’t close an unused credit card as a short-term strategy to raise your scores.
Boost Your Retirement Plan:
What you sow is what you reap! So, start saving for your retirement. Even if you’re covered under a retirement plan at work, you can look at increasing your contribution towards the retirement fund. By balancing your portfolio with mutual funds, fixed deposits, and other financial instruments for those golden years and lets you enjoy your retirement days.
Increase Your Investment Portfolio:
Along with the new year comes new avenues such as an increase in your income, bonus or other sources of money. Don’t spend but rather channelise these extra funds towards investments. While the old school method of saving through FDs and Savings Account was a good proposition a few years ago, investing in mutual funds and other risk-related investments have become the new term for savings. This does not mean that there aren’t any risk-free instruments. Investing in People’s Provident Fund (PPF), National Pension System (NPS) along with FDs, Savings Account offers you the confidence to save for your retirement without risking your hard earned money.
Make sure to set realistic financial goals. Otherwise, you might end up not meeting your financial goals. Take this opportunity to emphasize what really matters to you when it comes to a strong and stable personal finance. It may be an excellent idea to keep a checklist to keep a track and make necessary changes as and when required.