What Are Your Financial Resolutions for the New Year? | December 30, 2015
As the calendar nears the end of its final page, New Year’s resolutions once again become a conversational go-to with the promise of new beginnings and the possibility of self-improvement. While Dec. 31 is a day to reflect on the year gone by, Jan. 1 is a time to look forward to the New Year, review your financial scorecard for the past year, and then look for ways to improve in 2016. The New Year is a great time to overhaul your financial life for the better, and one excellent place to start is by making good resolutions that can help get you closer to your money goals. Although you may be thinking that your historical success rate with New Year’s resolutions may be low, this should not discourage you from improving your financial habits in 2016. In the words of theologian Carl Bard, “Although no one can go back and make a brand new start, anyone can start from now and make a brand new ending”. The best way to make 2016 a year of real achievement is to make a few small, regular changes and reap the benefits over time. So with this in mind, we’ve covered 10 New Year’s Financial Resolutions to help ease uncertainty and give you some ideas for the new year.
1. Get reacquainted with your Finances: The first step towards financial improvement is to get the lay of the land. As uncomfortable as this may be, it means checking the status of all your financial accounts, taking stock of your assets and debts, and evaluating your monthly cash flow. This will allow you to identify any areas that call for improvement as well as give you an opportunity to evaluate the benefits of upgrading an account. As we highlighted in our Reasons to Review Personal Insurances article, financial needs are bound to change from year to year, making regular review an essential task.
2. Revisit Financial Goals: Take a look at the goals you established for 2015, or even 2014. Were they met? Is your family still on track to meet and ideally exceed longer-term goals? Although it may feel repetitive, reincorporating your previous financial goals is an effective way to continue working towards longer-term goals and may stir past motivations to accomplish what you want.
3. Take Stock of Spending Habits: Don’t guestimate how much you are spending on a daily, weekly or monthly basis. Read over your statements and categorise your habits accordingly, in a way that makes sense to you.
4. Check in On Long-Term Financial Security Goals: Look at your retirement portfolios and your superannuation account – are there elements that could be more optimally balanced?
5. Adapt Financial Plans and Formulate a Strategy for the Upcoming Year: Go a step further than discussing your goals and aspirations for 2016, and draft a plan. Write out your short, medium and long-term goals, and use the information you have collated to make informed decisions and help you see your big financial picture.
6. Prepare for Tax Season Early: If your documents are not all centrally located, organise them as you go through them during your Resolutions To Do list. You’ll thank yourself later!
7. Plan for Upcoming Irregular Expenses: Is there a major event coming up in the next year that could do with pre-planning now? Weddings to attend, significant birthdays or family vacations? Map them out and give yourself time to plan appropriately.
8. Start Saving: Every time you get paid, automatically have your savings split from your spending money. Set a percentage of your income that you aim to save each week, month or even year. Over time, your savings will build and give you more options in life.
9. Set a Good Financial Example: Children learn by example, which means that they are likely to be continuously internalizing how you handle your money. With this information serving as the foundation for their future relationship with their personal finances, you need to do the best to continuously improve your own financial performance so as to teach beneficial lessons to your children or loved ones.
10. Review Personal Insurances: Not only for yourself but just as importantly, for your loved ones. Changes to your personal situation during 2015, and anticipated changes coming into 2016 could mean the review of your personal insurances is needed sooner rather than later – Reasons to Review Insurances.
As 2015 comes to a close, consider these 10 resolutions to keep your financial health in check (Financial Health Check Article) and solidify a foundation for a prosperous 2016, and many years to come.
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
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