So it’s the first month of a new year and we can all feel that pinch post-Christmas. January is a great time to re-strategize and build healthy personal finance resolutions. There is no better time to feel motivated to set financial goals and make decisions towards a brighter financial future. Whether you are looking to invest, save or finally set a down-payment on a home, there is a multitude of reasons to be aware of what is happening with your finances.
Here is a list of 5 tips that are easy to stick to and will lead towards your goals.
1. Know why you are saving
It may seem like an obvious statement to make, but so many of us have goals that get lost amongst our everyday stresses and strains. If you have an obvious reason for saving such as a wedding or for a new car, then you have something to work towards. It also gives you a set number to reach, which can help with understanding your level of productivity towards acquiring your goal. If you don’t know what you’re saving for, think about where you want to be in 12 months’ time, such as debt free or in a new job, and work towards this goal.
2. Become one with your bank accounts
We have all made the mistake of not being 100% up to date with what’s happening within our bank accounts. Whether it’s old payments that we haven’t cancelled that are still being paid, or we get confused when we think we should have a specific amount in our account that just isn’t represented within our statements.
When you are confused by your finances, it’s almost impossible to make changes to our spending. In order to get on top of this, start by collecting all your bank statements and paperwork. Look back over last year’s spending and look for the patterns that will tell you where you are with your accounts. There may be a need to visit your bank and speak to an advisor in order to cancel payments or just simply find the answers to questions that might arise.
3. Spring clean your credit
Do you know what credit you have? If yes, then do you know what the latest interest rates are on your accounts? With the economy constantly moving and changing, it can be hard to keep up with your credit at times, so your next port of call should be to know exactly where you are up to with your credit/store cards and loans.
If you have a number of credit cards then consider how you are using them and what changes you can make. A good starting point is to look at whether you can transfer your largest payments to low interest cards or whether you can transfer you balance to a 0% card.
4. Look at your portfolio mix
If you have a mixture of assets then you need to know how they are being used and whether they are being kept wisely. If you don’t have any personal assets, then have you considered starting your portfolio?
Even in this age of austerity, there are still a mixed amount of asset classes available to you, keep in mind that all asset classes come with their own risks and opportunities, so do your homework. The benefit of carefully selecting your investments and creating a well-rounded portfolio are integral to your financial future. The main points to consider are your saving timeframe and managing your emotions when selecting investments to stay on track.
Since buying shares online is now a solid investment option, becoming involved in the stock market can be part of a well-rounded strategy to increase your capital. Many investors prefer to buy shares for a significant amount of time with the hope (or educated opinion) that the shares’ value will go up with time, as many solid shares in the stock market have done over the past 10 years. However, the current volatility of the stock market as of August 2015 has scared many investors into more ‘short-term’ purchases that buy low and sell high. The best bet is to remain updated on the economy and stock market as well as its main influencers, and thus make smart decisions on your shares.
5. Work out a clear and concise budget
Never forget your end goal. Whether you need to make cut backs, or if you can simply carry on as you are; having this goal in mind will make saving so much easier.
Set a realistic budget based on your income and expenses and place a deadline that will help you strategize towards your goal.