As we leave the joys and sorrows of 2015 behind us, we welcome the New Year with great anticipation of a fantastic year ahead in every aspect of life.
These aspects usually include family, health and work, just to name a few and are commonly tied with the ever popular resolutions. What New Year welcome would be complete without them?
In true welcoming spirit, we've helped you outline some money resolutions you may certainly want to consider taking on in the year ahead to help you inch closer toward achieving your financial goals.
1. Pay Down Your Debt
It doesn't matter if you're walking into the New Year's with debt or are planning for a sizable spend that requires large credit – either way, a firm commitment to paying down your debt; past, present and future, goes a long way.
The most common debt that people face is credit card debt because it is so easy to rack up without realising. However, to continue to turn a blind eye to your debt will only result in excessive interest paid and continued bondage to the bank.
If you find yourself facing the above problem, choose to consolidate your credit cards under a personal loan or use a balance transfer. Whilst consolidation loans are sometimes tagged with high, fixed interest fees; the structured payment plan and single monthly payment makes it easier for you to repay. It also frees up cash from your monthly salary for necessities so you don't have to turn to credit again.
2. Bump Up Your Savings
The reason they say its never too late to start saving is the same reason you hear the term 'saving' at any discussion about New Year's resolutions – and if you haven't begun, there's no better time to begin than now.
Best part of a swelled up savings pot is you can use it for practically anything and everything – through the particularly large pampering spend (in moderation of course) or tough times where an emergency stash is needed.
Stick to a reasonable amount you wish to set aside from your salary for monthly savings. However, don't be too ambitious with this amount as you would find yourself dipping into your savings and demotivating yourself from continuing with your plan.
Your primary source of these savings would come from your salary and through simple saving tactics like dumping money into a fixed deposit account for instant, you'd be all set by year's end. It locks up your money for a tenure period of your choice and rewards you with pretty awesome annual returns.
If you have difficulty regulating your regular savings account, simply create one solely for savings and inform the bank that you would like to have a no debit card, or limit withdrawals by requesting for only over the counter withdrawals, which you could turn to in times of emergency.
3. Cut Off Unnecessary Spending
Before we traverse this wonderful New Year's resolution, it is important to take note that it would certainly help with the aforementioned ones should you be able to muster strength and will power to scale back on unnecessary spending.
First, one would have to determine the 'wants' and 'needs' that can be foreseen in the year ahead. Start off by listing down these probable items and include other activities that your lifestyle have absorbed thus far too.
From this list, a larger scope opens up and you would be able to see clearly which item's cost you can certainly do without and cut back on. For instance, a weekly outing to the movies can be alternately replaced with cheaper and yet equally entertaining activity or simply reduced to fortnightly as opposed to weekly.
Or perhaps you find yourself indulging in impulse shopping all the time? Find alternative routes like only shopping during mega festive sales or adopting a credit card that rewards you for every outgoing penny (remembering of course to pay your debt immediately as per resolution 1).
Auld Lang Syne!
You would've certainly hum the tune in the above header at any New Year's countdown at some point in your life. Its meaning is pretty interesting as it translates to 'times gone by' and that remembering friends from the past is of utmost importance.
Similarly, some of us have made financial blunders in the past and the most important thing to remember is to take lessons from it and not to repeat them ever again – especially in the fold of 2016 where our true companions come in the form of resolutions like the above.
Happy New Year, everyone.