Wednesday, 14 December 2016
NEW YEAR'S RESOLUTIONS
Setting New Year's resolutions regarding money might be easy. However, it is an entirely different story to actually commit to these resolutions and follow through on them. That is why it is so important that the financial goals that you set for yourself are achievable and realistic. There is no faster way of abandoning your New Year's resolutions than to realize how unattainable they are or that the bar has been set so high that the only person who could achieve your goals would be Warren Buffett. The following are a couple of money-saving ideas that you can use for setting New Year's resolutions that are reasonable and that can help to promote continuous progress all year long.
1. Become debt-free
We might as well start out with the big one - freeing yourself completely from debt. Whether this goal is attainable and realistic will depend on what your debt and financial situation is. How much debt you have, what kind of debt it is (mortgage, car loan, credit card, etc.), your income level, and what the interest rates are on your debt all can influence how successful and how fast you can become debt free.
It is frequently very important to begin first with decreasing your credit card debt since most likely
it will have the highest interest rates. Another good place to start is with smaller debts since you can build some confidence up by crossing them off of your list of debts, and allow you to focus on debt issues that are more problematic.
2. Make extra payments on your mortgage
An excellent way to get your new year started right can be to commit to making an extra one or two payments towards your mortgage. When you make an extra payment every year, you can reduce the length of time that it will take for you to get your home paid off, and also reduce how much interest you pay to the bank. Since a majority of mortgage interest rates are much lower than the rates on credit cards, it is very important for you to review whatever other debt you have with higher interest rates that you might need to deal with before spending extra money on your mortgage.
3. Find ways of generating side income
One great financial resolution is to learn how to make some extra income. In a weak economy, supplemental income from a side business or second job can provide you with peace of mind and can be an excellent buffer against the stresses that come with economic problems. Even a couple of extra hundred dollars per month can be an excellent way of reaching your other financial goals such as starting your emergency fund, making those extra mortgage payments or paying down debt.
4. Start your rainy day fund
Another great New Year's resolution is to start an emergency fund if you don't already have one. You never can tell what might happen in the future with your finances. However, if you have an emergency fun, you can have more confidence when it comes to facing the unknown. Although some financial gurus recommend that you have £250 saved in the bank, you might want to have more than that. These days, you can't get too far on £250, especially if you should end up losing your job. Even having one to two months of income can end up going very fast, so make sure to build up an emergency fund that you feel comfortable with. Remember that you may want to first deal with any credit card debt you might have to get rid of those expensive interest payments before starting to save.
5. Coupons, Freebies and Deals
Being frugal is now one of the best ways to save, with lots of coupon sites, free UK stuff sites and deal websites then there is lots of ways you can save money, the only downfall to using them is the time it takes to find them, but you will save lots of money.
6. Understand your investment
So many people have investments that they don't know much about. The recent mortgage meltdown is a perfect illustration of the fact that so many homeowners really didn't understand the mortgages that they had committed themselves to. Many people associate understanding their financial situation and investments with knowing which stocks they own or how much their contributions are to their 401Ks. Although those are great initial steps, you should make even more of a commitment and understand financial topics like how Social Security benefits get calculated, how much credit is costing you every year and where your money is invested.
7. Learn how to save
It might sound easy to learn how to save. However, it isn't something that happens overnight. It can be a very involved and lengthy process to become used to money-saving techniques, particularly for people who don't have a lot of experience with it. Using a budget, tracking your expenses, searching for store sales and discounts and using coupons are skills that until recently many people haven't used much. A new year can give you the perfect excuse for buckling down and familiarizing yourself with the process of saving money.
8. Create a budget
It is an easy resolution to start off the year by setting up a budget. You can do it while soaking in the bathtub or watching television. Your budget doesn't need to consist of a fancy spreadsheet with charts and graphs. You can get started with a basic handwritten list of income and expenses, and then if necessary expanding it later. The most difficult part of the resolution is to make the commitment to watch, modify and adhere to your budget all year long. Put your budget somewhere that is easy to see like on your computer desktop or refrigerator so that you will be constantly reminded of it!
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