With the new year around the corner, it’s time to set some new goals. While it’s common to have career, health, fitness and habit related goals, very few incorporate financial planning into their new year resolutions.
Financial status determines all aspects of your life, and as such, it is recommended that you set financial resolutions every year. Defining your financial goals is the starting point to improving your finances.
To help you get started, here are 6 financial resolutions you can set for the upcoming new year:
First and foremost, save your earnings! Saving money may seem like the most apparent strategy to maximize your finances. Savings accounts help you put away some of your money every month and keep it as an emergency fund. You can cut back on your spending and utilize bank cards for rewards by opening a savings account at a reputable institute.
HNB FINANCE offers a General Savings Account where you can maintain and access your savings deposits with convenience. The competitive savings account interest rates are calculated on your daily balance and credited to your account monthly.
Keeping track of your spending habits is the first step in financial planning, and there’s no better time than the new year to start recording them. Evaluate what areas you spend most lavishly, whether it’s for dining out or going on shopping sprees, identify where your money is spent. Take a look at the services that you’re subscribed to. From magazine subscriptions to online services, we often remain subscribed to services that are no longer of use to us.
Money mismanagement is one of the leading causes of financial instability. Taking stock of your spending habits makes it easier to cut down on unnecessary expenditures and eliminate those you can do without.
Set a weekly or monthly budget for your expenses. While budgeting can feel constricting, it is the best way to keep track of your spending and is a valuable tool to determine where your money goes each month.
A detailed budget plan should consist of clearly written out fixed expenses such as rent, utility bills, and groceries. You may allocate a sum for flexible expenses such as dining out and entertainment based on these. The budgeting process can help guide your costs to cut out unnecessary spending. The 50-20-30 budget rule states that you should ideally allocate 50% of your income on essentials, and 20% should be assigned for savings while the remaining 30% is allocated to non-essential items or wants.
Investing allows you to not only put away your money in a safe place but also helps to multiply it. You dont require knowledge in stocks and market economies to start investing. The easiest option to get started is through fixed deposits.
Fixed deposit rates are generally far higher than the rate of interest in banks. While many banking and financial service providers offer FD facilities, make a note to select a reputable service. HNB FINANCE Fixed DepositsHoffer some of the best interest rates and fast and convenient refunds on maturity, along with the ability to take loans against your FD if you need access to your cash in an emergency.
Credit card debt is rising worldwide, and there is much you can do to not get caught in the trap. If you own multiple credit cards, try to pay them off entirely and utilize one for your regular expenses. Do not open a new credit card each time you run out of credit on the existing one, as this can lead to a credit crisis.
Always pay your credit card bills on time to get the maximum use of your credit limit. Your payment history determines your overall credit score, so you should not only make your balance payments on time, but you should also ensure to pay it in full every time. This can help reduce the interest charges or additional fees resulting from carrying forward your debt from month to month. If you’re unable to pay it in full, you must at least make your minimum payment on time to avoid late fees and other penalties.
If you have any debt in your name, whether it’s an education loan or a home mortgage, prioritize paying these off at the earliest possible opportunity. If you cannot become debt free just yet, try to minimize the balance you owe.
Coming up with a financial plan to reduce what you owe is really important, even if you have to make some sacrifices to do it. Perhaps you can start by paying a little extra every month. This will help to reduce your loan tenure over time.
Incorporating these resolutions for the new year will have you on track to achieving complete financial freedom in no time. Take this opportunity to establish a clear, precise, and achievable set of financial resolutions.
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