More often than not, New Year’s Resolutions are usually focused on two things: healthy eating and exercising plans. We tend to forget about other areas that need some serious planning too: our finances.
For those who had had a well-planned financial goal for the year 2020, there is a good chance it did not materialize. It may feel frustrating, but that’s understandable given the pandemic situation. Now that we have entered a fresh new year, you probably are ecstatic to start over and improve your money-related New Year’s resolutions.
You probably are too excited to write down everything you want to happen to your finances this year. But don’t forget to consider your current financial situation; it can otherwise get overwhelming. That can kill your momentum and spoil the whole plan even before you reach mid-year. Remember that we are still in the middle of the pandemic. Budgeting and income generation might be a little tight, so set small but realistic goals. They will eventually lead you to reach larger goals.
Okay, before anything else, give yourself a financial checkup.
Before you start making new New Year’s financial goals and resolutions, you must recognize where you are. Ask yourself these questions:
- How much money have I saved up?
- How much debt do I have?
- How much money do others owe me?
These factors need to be determined so that you can start to point to the right direction. Only then you can proceed with the rest of your goals toward healthy finance management.
Start knowing where you are financially before you begin your journey. If you’re not so sure of how to do it, don’t hesitate to ask the professionals. Organized finance is not just for the CEOs, there are accounting services for truck drivers and other blue-collar workers, too, that can help them organize theirs.
Whether you are a student or an employee, being financially healthy can lead you to live a happy life. Here are some New Year’s resolutions that you can adopt to reach your financial goals this 2021:
1. Create different streams of income
You can’t go on with number 2, number 3, and the rest without doing this. You can’t spend less if you have nothing to spend or invest if all the money you have is only for your necessities. Find a way to multiply your income generation.
Here are some ideas that have the potential to generate income without hurting your full-time job:
- Start a blog/vlog. Consider this a passion project. Create a YouTube channel and create videos that resonate with the things you love. That way, it will not feel like work. It can be cooking, traveling, or dancing. This is a great opportunity to do affiliate marketing.
- Sell a product or service. Do you know how to make soap? Candles? Can you knit? These are a few of the things you can sell in the neighborhood. If you want to go big, create a website for your products. Speaking of a website, if you know how to build one, you can offer this, too, as a service.
- Rent out space you don’t use. Hello, AirBnB.com!
2. Don’t just save; invest!
Saving the 20% into your bank account, as soon as you get your paycheck, is how you save. The 50/30/20 budget rule, right? We get it now, but if your goal is to get rich, (I mean, who doesn’t want to get rich?) saving money won’t do much. The best way to increase your money is to invest it.
Sure, it’s great to have savings, but it’s better if your savings can generate more money instead of just being stagnant in the bank.
Here are the types of investments you may be interested in:
- Exchange-traded Fund (ETF)
- Real Estate
Pro tip: It is important to invest only in what you understand.
3. Get out of debt
Debt can be consuming and, worse, depressing. The best financial gift you can give yourself is financial freedom. Work on being debt-free this year and start living your best life. To do this, first, don’t add more debt. The best practice that you can do to beat adding more debt to your account is to stop using credit cards. Instead, you may use cash or a debit card for a cashless transaction.
We have mentioned only three smart and realistic financial resolutions to start with this year. Too many resolutions can be overwhelming that you won’t be able to accomplish or stick to one goal until the end of the year. Add some more when you are halfway through the year only if you find these goals not challenging anymore. Find balance.