But do you ever think about money resolutions? Implementing smart money resolutions is always a sensible idea at the beginning of a new year, when everything feels fresh and new, and is a sure-fire way to make them stick.
Our goal is to empower you financially, so you can achieve your financial goals and make 2018 YOUR year of financial success. Whether you’re just getting by, need help with managing your savings or you’re in debt, we’re here to help.
The ONLY 6 Money New Year’s Resolutions You Need
To get the new year off to a good start, here are the only six money New Year’s resolutions you need to make 2018 YOUR year of financial success! You’ll be amazed at how much progress you will make financially by adopting any one of these resolutions.
1. Set Goals for Your Money and Review Them Often
The more complex our goals, the less likely we are to stick to them. This goes for most things; let’s take running as an example. If you’re new to running, aiming for a marathon in a month’s time, isn’t going to be realistic or achievable.
Now if we take our finances, aiming to save £500 a month when we earn £1000 a month and have rent/mortgage and bills to pay probably isn’t realistic or achievable either.
But saving £100 a month might be. If you set an unrealistic goal, and then fall at the first hurdle, the chances are, you’ll give up. This is far from financially empowering.
A clear and reasonable financial goal can be to save a certain amount per month. Or it might be to only spend a set amount on socialising, or to set up a pension or ISA.
You’ll be more motivated to save or get out of debt if you set specific goals. For example, by the 31st of December 2018, I will have £1,200 saved for an emergency by saving £100 each month. So, go ahead and write down your goals along with the amount you will need to save to achieve your goals.
Once you’ve set your goal, or goals, it’s important to review then often. If you don’t, then you could find yourself taking a step backwards.
By reviewing your goals, you might find you’re putting away a little too much each month, and this could mean you regularly fall into your overdraft.
On the other hand, you might find that you can afford to put a little more into your savings each month. Rather than having a surplus sitting in a regular bank account, you can add it to a higher interest savings account, where it will work harder for you.
Download our personal financial planner to help you track and achieve your financial goals this New Year.
2. Always Do this Before You Spend
Save first and spend what’s left over. The key component to wealth building can simply be expressed as Pay yourself first.
If you only choose to carry out one of these six money resolutions, make it this one. (Although obviously, all six is ideal!)
Once you’ve set your financial goals, it’s then imperative that you pay yourself and invest the money saved after you have put an emergency fund in place.
Investing helps you focus on your long term goals. Short term goals such as finding bargains and balancing your check book is all well and good but focusing on your long term financial goals will help grow your money and build sustainable wealth.
In his bestselling book, The Automatic Millionaire, David Bach gave a simple concept to pay yourself first – by simply paying yourself for one hour each working day.
Make pay yourself a priority. Do this even before you spend on the essentials. Because once you’ve invested your ‘self-pay’, budgeting is irrelevant. You can then spend whatever you like with what you have left.
On payday, think self-pay first, whatever you can afford, then the essentials, then your play money. It doesn’t matter if your self pay is a tiny amount, what matters is that you’re setting it aside each month, and investing the money saved.
And the secret here is automation. Set up a regular transfer to your saving or investing account on payday and you won’t have to think about it. Your money will simply be working nicely for you in the background and you won’t miss the money you never see!
There are several reasons for paying yourself first. You might be putting money towards
- Building an emergency fund
- Funding your retirement
- Starting your own business,
- Putting a deposit down on a home
- Simply growing your wealth.
Either way, it pays to pay yourself first and the best way to pay yourself first is to automate the process.
3. Prepare for the Unexpected
Do you plan for emergencies? What would happen if your oven broke, a job layoff, or you needed to make a desperate dash to another country to visit a sick relative? Do these things play on your mind, or keep you awake at night?
Nothing can sabotage your financial success like an unexpected event that causes you to go into financial stress. An emergency fund can help you prevent financial disaster. It will free you from the perils of unexpected emergencies and expenditure.
It is one of the best ways to take control of your finances, stay far away from credit cards and eliminate day to day money worries.
We strongly recommend every woman has an emergency fund and that you aim to stash away at least three months’ worth of living expenses, so you won’t have to rely on credit for unexpected life events.
You can fund your emergency fund by using a few months’ worth of your self-pay before you start investing – once self-pay becomes a habit, building your emergency fund becomes even easier.
Also, if you get a raise or bonus, receive cash as a gift or you’ve paid off a loan why not put that towards building your emergency fund? Check out our handy guide on How to Build an Emergency Fund Quickly to help you get started.
Don’t forget to set up a separate account for your emergency fund to prevent easy and immediate access so you don’t spend it on non-emergencies.
4. Spend Less Than You Earn
This might sound like an obvious one, but it’s very important if you’re serious about achieving your financial goals or building wealth.
Spending less than you earn and investing the difference is one of the key principles of personal finance and the boring secret to getting rich.
If you go over your means one month, then the chances are you’ll think, oh well, I can do it again the next month. But this is a slippery slope, one that you don’t want to start on, so avoid spending justification at all cost.
In his book The Secret Language of Money David Krueger says “through justification, luxuries have a way of evolving into necessities overtime. The special coffee becomes a routine, the better restaurant becomes the assumed standard and our expenses sneak upward and expand laterally”.
The sad truth is that if you don’t spend less than you earn you will never be able to progress financially.
Regularly spending more than you have will send you spiralling into debt. Then, you might find yourself borrowing more money on credit cards, loans or overdrafts to help dig your way out, only creating more money worries.
Download your FREE New Year’s resolution printable and start taking control of your finances today!
5. Become Financially Savvy
Money is for life, not just for now. You need to learn how to earn more, manage, spend smartly and grow it. So make being money savvy one of your New Year’s resolutions for 2018.
Being financially literate will increase your chances of sticking to your goals, developing good money habits and building wealth.
There are several ways to improve your financial literacy. One great way to do so is to read some good books. Here are a few personal finance books that might help you do just that.
You can also read financial magazines/newspapers, blogs and even attend money classes. Whilst you’re here, add us to your inbox and receive our regular tips and advice on being money savvy!
6. Get Out of Debt – and Stay Out
Did you know one of the biggest problems hindering most people from attaining the financial freedom they deserve is… debt? From loans to credit cards, many of us sabotage our financial success and never make any headway.
Avoid debt like a plague and make being debt free your passion this year. Being rich doesn’t necessarily mean living in a mansion and driving a sports car. For us, being rich is
- Having the funds to pay yourself,
- Living below your means,
- Making your money work hard for you,
- Staying out of debt,
- Being able to afford the things you love and
- Most importantly using your money to make a difference in the lives of people and causes you care about.
If you’re struggling with debt or feel like you don’t know what to do to get out of it, get our eBook on How to Get out of Debt and Stay out Once and for All and let me show you the exact steps I took to get out of £32k worth of debt in 2 years.
Debt can feel like a never-ending cycle of interest payments and reminders. But with our guide, you can be free from the shackles of debt, and be free to live the financially solvent life you dream of.
Make 2020 count for you financially. Your future self will thank you for it, guaranteed.
Happy new, financially successful year!
Over to You
What simple changes can you implement this year that will have the biggest impact on your finances? And don’t forget to download your free New Year’s resolutions printable and start taking action.