Whether or not you’re the kind of person who sees the start of January as the time to set yourself resolutions and stick to them, the period after the excesses of Christmas and New Year is arguably one of the best times to actively get your finances into shape. Here are five great money-related resolutions it’s definitely worth committing to in order to make 2021 the year you take control of your money.
- Start a budget – The secret to financial security isn’t making lots of money, but sensibly managing the money you have. A budget is the best way to start doing this, ensuring you know where your money is going and sticking to the plan you lay out for yourself. It can feel intimidating at first if you’ve never budgeted before, but it will undoubtedly help you to cut out overspending and reduce your money worries. You can find a FREE Budget planner template on our website. https://berryandoak.com/library/
- Manage your debt – Getting out of debt can seem a long way off if you don’t make plans for how you’re going to become debt-free. Start by writing a list of how much you owe and who to and find out how much y interest you are paying on each. Could you use savings that are earning a low rate to pay off borrowing at a much higher rate? Or could you make any of your debts cheaper by switching to a better deal? Then prioritise the repayment of your debts so that you focus on clearing your most expensive debt first and then work down your list.
- Start saving regularly – Once you’ve got your debts and spending under control, building your savings is essential. You should aim to save at least 10% of what you earn every month. Again, you may have to make a couple of sacrifices here and there in order to do this, but when you have those savings earning you money in your nest egg, missing the occasional night out or frivolous treat will feel completely worthwhile.
- Increase your financial knowledge – This can be as simple as finding a book, magazine or reputable website and dedicating a little time each week to increasing your money know-how. Anyone who has financial security hasn’t done it through luck, but through understanding what to do with their money, so the more you learn the more secure your finances are likely to be.
- Start investing – Making some sound investments is often the crucial step from financial security to prosperity and success. However, you should only invest when you’re ready (i.e. once you’ve achieved the previous four goals). It’s worth getting good independent financial advice as well to ensure you make the right investments for your personal circumstances.
Adopting a few (if not all) of these new year’s resolutions, should improve your financial position.