It’s that time of the year again, full of optimism for the positive changes you’ll make to your life in the new year. Everyone is hopeful for their New Year’s resolutions and old resolutions are either left in the dust of last year or recycled as new promises. A really good resolution to start with, is to improve your spending and saving habits.
Here are our top 10 financial New Years’ resolutions you SHOULD be making this new year.
- Review the last year. Identify what worked and what didn’t work and create a simple plan on what to improve on this year, and how you will measure your success.
- Make a realistic budget and live within your means. Don’t be too hard on yourself to begin with and then if you are struggling or doing well you can re-evaluate.
- Save for an emergency fund. This should have enough money to pay rent and other expenses while you get back on your feet in case of a financial emergency. (approx. 3 months expenses).
- Cut costs rather than cutting back. You don’t need to change your lifestyle drastically to save money. Consider little changes first, like that morning coffee you could just make at work for free.
- Make a plan to eliminate your high interest debt. Compare interest rates with other financial institutions to check you’re paying it back at the best rate.
- Don’t consider buying sale items saving money, unless you were planning to buy the item anyway (I’m not talking about the shoes you have always wanted, more-so the new appliance you actually need). Even if it’s hugely reduced, you’re still spending money you could be saving.
- Protect your credit. Always make sure your repayments are on time, because the biggest factor for your credit score is payment history.
- Identify and do away with wasteful spends. I.e. veges that end up going bad, lotto tickets, and impulse buys you never use.
- Increase your contributions yearly. If you’re using Kiwisaver, a small percentage increase isn’t going to jeopardise your lifestyle but the difference in saving will definitely be worth it.
- Simplify your finances. Consider debt consolidation if you can get a better interest rate, making payments easier will help protect your credit, but also make budgeting less stressful.
The most important thing is to start the New Year with a positive attitude towards your money. Don’t stress, but make it your concern to improve from last year. Start to weigh up spending in terms of wants and needs, and put that extra money into savings! You will start to see healthy improvements in your spending habits but you will also feel better about your money, which will get the ball rolling for years to come, where your financial goals will get bigger and better!
Disclaimer: The above information is general in nature and not intended to be financial advice. You should consider seeking professional advice before following any suggestions in this blog/website.