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8 financial resolution tips for 2017
December is here and it's time to look towards the new year to set our resolutions.
New Year resolutions do not have to be just about losing weight, quenching your wanderlust or indulging in a new hobby. The aim is to become a better you, in every aspect.
It's good to shift your focus to your financial grounds for a moment. Where do you stand in terms of money? Do you need to boost your savings or should you be channelling your funds into investments? Where do you stand in terms of loans and other credit balances?
Either way, financial planning should certainly be one of your primary focuses for next year, especially since the economy isn’t looking too bright. Consider these 8 tips when making your financial resolutions for 2017.
1. Sort out your debt
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The first thing anyone should do is to eliminate any pending debt repayments as they tend to keep one from achieving their financial goals. Here are some tips to do that.
Personal loans and ballooned credit card balances do take up large chunks out of your salary and compounds over time.
Think of how amazing it would feel to no longer be tied down by debt and have full control of your income. You would be able to nurture your funds to its fullest extent and watch it grow.
Yes, it might take you the most of 2017 to tamp your credit down, but the financial freedom that comes afterwards is totally worth every penny.
2. Have a healthy emergency fund in place
Gone were the days when 6 months’ worth in salary would be to cover yourself in any eventuality. Jobs are being cut in Singapore and there have been a lot of changes in the workforce.
A good way to ensure that you have a solid emergency fund is by pumping extra money into it on a monthly basis.
Look at it as a money management tool – if you can discipline yourself into saving money into an emergency fund, chances are you won’t have issues creating and reaching other financial goals in the future.
3. Practice mindful spending
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Set limits on your expenditures; even the little ones. Mindful spending that’s inculcated into your life as a second nature will help you in so many ways. Learn to live on less than what you earn and avoid the inevitability of lifestyle inflation.
4. Invest, Invest, Invest
You’ve heard this sentence so many times that it is like a stale piece of bread, but yes, never pull all your eggs into one basket. Investing is the key to financial freedom. Warren Buffett said it best:
“Never depend on a single income. Make investments to create a second source.”
Here are some ideas on what you could look at to invest in, for beginners: blue-chip stocks, bonds and if you’ve got the appetite for it, you could even try out alternative investments.
5. Engage the services of a personal advisor
There’s no better way to strategise for your financial milestones for 2017 than with the purview of a personal advisor. Providend and Synergy are two examples of financial advisors here that can help uplift your finances.
Or if you’re more tech savvy, you could try a robo-advisory service!
6. Ensure you have sufficient insurance coverage
Examine your insurance policies and ensure that you have comfortable coverage. There is no need to have too much coverage. You wouldn’t want to be burdened with expensive premiums.
You will, however, need to ensure that your plans meet with the current cost of living, inflation rate and healthcare prices (especially if it goes beyond your MediCare coverage) and that it is suited to your personal financial needs.
7. Minor financial milestones are necessary
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If you’re absolutely lost and not sure where to even begin with sorting out your finances, it can be as simple as starting with smaller goals such as having a monthly savings budget.
This move will help you keep your spending in check and help you realign your spending blueprint. Sometimes, all it takes is an automated transfer request through accounts like OCBC's monthly savings account and POSB's eMySavings Account.
8. Train yourself to get into good financial shape
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Success is never an overnight thing. Train yourself and get into the right mode; figure out what works for you and what doesn’t.
If you failed to reach your financial milestone for the month, recalibrate and strive harder to achieve it in the coming days. Don't give up.
(By Annette Rowena)
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