Are you making new year’s resolutions? Typical new year’s resolutions involve some kind of weight lost, organization strategist or simply to save money! The latter of these resolutions is what I want to talk about today. It seems as money talk is such a taboo subject that no one wants to talk about it. Well, we all know that without securing our financial future we will be working way beyond our retirement age. In my opinion, financial conversations should occur frequently and should involve the entire family. Yes, I do understand that kids will be kids and that they might just blow you away or just plain ignore you when you try to speak to them about financial responsibility, however, this conversation needs to occur more than you think.
New Year’s Financial Resolutions!
Let’s begin by setting ourselves up for a successful financial year, these are some of our tips to make it as such.
Step 1: Set up an emergency fund… Set up a separate savings account that will house your emergency fund. Most financial planners advice to keep a 3-6 month emergency fund, in my opinion you should strive for a 12 month emergency fund. How can you make this possible? Put your extra money into this dedicated account and if possible, try to make this process automated. If you make the commitment of depositing whatever you can contribute, soon it will become a habit and you will be on the road to getting your emergency fund rolling.
Step 2: Reduce your debt… Most of us carry a credit card or 2 in our wallets, that’s not the bad thing, most of us carry huge revolving debts in our credit cards. By carrying revolving debt, we are not only racking up additional debt, but we are practically throwing away our hard earned money. In order to successfully navigate this financial road, you should vow to pay down your debt. Start by paying down the credit card with the highest interest rate, once that one is done, use that money to lower the credit card with the second highest interest and so forth. By paying down our revolving credit, we will save money and have a brighter financial feature.
Step 3: Spent less… Spent less, includes figuring out your needs versus wants, plus figuring out what is making you spent more each month. Figuring out your needs versus wants: do you really need that extra morning latte from the corner coffee shop? What about that big cable bill every month? Figuring out your needs versus wants will save you money each month. Now, what about your other monthly bills, such as your insurance, phone, internet, mortgage bills? Inquire about those with the corresponding companies and figure out if you are spending too much.
These are just three easy tips to get you started on the way to a successful financial independence. There are many other things you can do, however, getting organized and staying on track is up to you. Don’t try to do everything at once, but do try to keep up with your New Year’s Financial Resolutions!