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Did you make money resolutions for 2015? If you did, how do you think you are progressing so far? Chances are, a lot of your financial resolutions have already gone down the drain.
While it is not our intention to mock those who fail at their resolutions, you need to admit that people really lack the motivation to follow through with their plans. They make all sorts of promises to change or improve their lives, only to forget about it after a few weeks or so.
Resolutions are great ways to motivate you to make changes in your life. According to a study published on Stanford.edu, when you have resolution, the chances of you making the needed change is higher. The article discussed that research shows how people who resolve to change feel more confident and in control to make it happen. They feel more hopeful that the improvement that they are aiming for will come to pass.
Looking at the financial situation of Americans, you will realize that a lot of people are still in need of money resolutions. There is so much room for improvement when it comes to our personal finances.
More than ever, we need to strengthen our financial position because you will never know when another economic crisis will hit. We got a bit of scare a few weeks ago when the stock market plunged in reaction to what happened to China. You want to be prepared so you need to think about any resolutions that could improve your personal finances.
4 financial resolutions that you should start doing now
If you think that you need to wait for the New Year to roll by before you make money resolutions, that is not entirely correct. You can always start changing as soon as you realize that there is something that needs to be improved. This is especially true when you are talking about your finances. If you do not implement the changes needed, if could cost you in the long run.
Financial resolutions are always a part of a person’s need-to-improve list. According to the survey done by Nielsen.com, the top 4 resolution for 2015 was to spend less and to save more. 25% of their survey respondents said that they will work to implement this change in their life for this year. We do not have the data to show how the respondents were able to follow through with their resolution but that is besides the point. What we want to point out is the fact that some Americans consider their financial position to require some level of improvement.
A lot of people will wait for the New Year or a special occasion before they act on the changes they want to implement. However, there are certain money resolutions that you should act on immediately. Here are 4 resolutions that you have to start working on now.
Saving for retirement
If you have yet to build up your retirement fund, now is the perfect time to start. Enough with your excuses and the payments that you think should be spent on first. You need to start saving for your future and you need to do it now.
A common mistake that people make is thinking that they need a bigger amount in order to save enough for their retirement. You need to keep in mind that you can contribute as much as you can afford – even if it is only a few hundreds a month. Do not be discouraged if you cannot contribute more. A few is better than none – always. That small amount can grow over time – as long as you are consistent in making your contributions.
Have a repayment plan for debts
Among the money resolutions that you need to work on immediately includes a repayment plan for your debts. If you are just paying them off according to what you are receiving in the billing each month, you may want to consider the many debt relief options that could speed up your payment process. They will greatly help in managing your payments.
You might want to check out two of the most common repayment strategies consumers look into when they want to put order in their payments. You have the snowball method, debt consolidation loans, debt management, credit counseling, debt settlement, and even bankruptcy. All of these options cater to a specific financial situation. You may want to study your current financial position to figure out which option will provide the best repayment plan for your debts.
Monitoring your credit
This is another resolution that you need to act on immediately. Credit monitoring is simply looking at your credit reports every now and then. You need to check your data from any of the three major credit bureaus: TransUnion, Experian and Equifax. There are many benefits to this. One is you get to check your credit situation. You may be borrowing too much already and you need to rein in on your use of credit. The most important reason to check your credit report is to ensure that there are no errors. If there are, you need to dispute them. Sometimes, credit monitoring will alert you if you had become a victim of identity theft. If you do not catch this early, you might find yourself having a hard time proving that you did not open the credit account that is reflected in your credit report.
Investing your money
The last of the money resolutions that you need to act on immediately is to invest your money. This is the best way for you to grow your finances. If you are scared that your minimal contribution towards your retirement fund is too small, then you may want to invest that savings so it will grow faster. That is thanks to the compound interest in most investment accounts. When your investment profits from the interest, that is added to your existing balance. That means the interest earns interest too.
When you realize that these areas in your financial life requires improvement, you need to act on them immediately. Delaying the improvement could make it harder for you to enjoy the benefits.
How to set up a strong financial future
When setting up money resolutions, your intention is to have a strong financial future. To help you make this improvement come faster, here are a couple more tips that you should implement in your life.
- Start now. Whatever it is, you simply have to make the commitment to start now. If it is paying off your debts, saving for retirement, improving your credit score, or building up your emergency fund – you need to just start now. According to ReviewJournal.com, a lot of Americans want to save. That is a great target to have. However, they find it hard to commit to it. Do not be part of this statistic. Planning is one thing. Implementing them is another. Make sure you end with the implementation.
- Develop the right habits. You will find that the key to financial success is to implement the right financial management skills. These include smart spending, budgeting, and saving. If you have the right habits, you can be assured of a well managed finances that will not fail you when you need it the most.
- Set financial goals. When you have goals, it will help give your life and finances some direction. It will help define the decisions that you will make – especially when it comes to your finances. You need to think about what you want to happen in the future and set the goals that will help you reach that dream that you have.
- Make smart spending choices. Another thing that you can do is to make smart choices when it comes to where you will use your money. Make sure the expenses that you will spend on will only benefit your finances or personal net worth. If not, then do not use your money on it.
- Build and monitor your credit. If you have a bad credit score, you need to rebuild it and take better care of it. One of the ways that you can take care of it is to monitor it. One of the reasons, as mentioned earlier is to help check if you had been a victim of identity theft. You need to ensure that you can prove that you did not make any of the unauthorized transactions that are reflected in your credit report.
- Educate yourself. You should also try to educate yourself so you will know how to manage your finances well. It is easy to practice good financial habits if you can only identify what they are. Not only that, you need to be aware of the latest news like what is the new scam that could rob you of your hard earned money. Sometimes, being aware is all you need to help protect and improve your finances.
It is important to remember that no matter how great your money resolutions are, it will only be beneficial to you if you follow through with it. Otherwise, you might find yourself in the same position before your resolution.
