As April is the first month of a new financial year, it is a great idea to make your financial resolutions. So what could be your financial resolution for FY17?
Maybe you would want to save more for your child’s higher education or wish to have an appropriate mix of investments. Here goes a list of resolutions and how to adhere to the same.
Spend less and save more
Every one of us have monthly expenses, but you may be able to reduce costs in multiple ways ranging from refinancing to a lower housing loan rate or shopping during discounts. Discretionary expenses those ‘nice to haves’ actually provide an even bigger opportunity for savings. If spending less is your goal, take a look at how often you eat out and any impulse purchases. When you see how much they cost, it may provide the incentive to cut them out. Saving more is a close cousin to spending less. After getting a sense of your spending, you can begin to figure out how to increase your saving. A disorganised approach to saving will almost certainly produce haphazard results.
The point is to create a savings plan which will help you to stay disciplined. One of the simplest ways to ensure you save regularly is to make it automatic. That means scheduled, regular, automatic transfers into a savings or retirement account. If the money is not in your main account you are less likely to spend it frivolously.
Pay off debt
Another resolution that needs further details. For instance, do you want to completely erase your debt by the end of the year; reduce it into half; pay off your credit card outstanding; consolidate your other loans?
The monthly instalments can take a big slice of your income. The key is to pay down the debt with the highest interest rate first, like outstanding on credit cards. Consider paying more than the minimum each month. Set a specific goal and come up with a timeline. Ensure that it
is doable too, so you will not get discouraged.
In other words, the goals must be SMART one. Financial goals must be specific, measurable, achievable, realistic and time bound.
