4 Financial Goals To Start 2019 On The Right Note
The New Year is not just the beginning of a new start, it is also an opportune time to look back on the past year, the year ahead and the future years. Most people start off the year with New Year resolutions. But according to experts, financial resolutions often fail. Instead, experts recommend starting the year with financial goals instead if you want to fulfill them. If you are thinking about your financial goals right now, here are four that we would recommend you to start with to get your 2019 off to the right start.
Being in debt is not only financially draining, it can be mentally draining as well. You will find yourself restricted whenever you want to make a financial decision. Why let yourself be drained financially and emotionally when you have the power to make yourself debt free?
If you want to clear your debt effectively, there are two methods that are highly recommended: Debt snowball method and debt avalanche method.
The debt snowball method works by clearing your smallest debt first. The idea is to clear as many small value debts as possible so that you do not let your debt snowball. It might be small now, but if you continue to let it snowball, your debt can chalk up quickly.
The debt avalanche method is the opposite of debt snowball method. Instead of clearing the smallest debt, you should clear the debt that is the most expensive, i.e. the debt that charges the most interest rate. You should aim to repay as much money you can on your most expensive debt so that you can clear it faster.
Budgeting is a habit that everyone needs to cultivate, be it whether are low socioeconomic status (SES) or high SES. In fact, if you have the right budgeting habit, you are taking your first step towards high SES. With a good budgeting habit, it can make you feel like you have gotten more money to spend at your current income.
To start cultivating a good budgeting habit, there are three things you need to do. Firstly, keep track of your expenses. It is the first step towards being a good budgeter. By keeping track of your spending, you know where every dollar of your income goes to. Secondly, keep an eye out for good deals. Good budgeters are able to get more value for the same dollar by keeping their eyes open for quality items at good prices. Thirdly, implement the 50-30-20 rule: 50% of your after-tax income should go to needs, 30% on wants and the remaining 20% should go into savings.
There are two types of investments you should think about making in 2019. The first is investing in yourself. Given that your future depends on the skills and aptitude that you represent, investing in yourself is one of the best return on investment you can find. The effort you put into investing in yourself will determine the quality of your life now and in the future.
The other type of investment you should be making is in investments, literally. If you have already started investing, it is now the time to review your investments and switch out of the under performing ones. If you haven’t already started investing, now is the right time to start investing. Investing helps you grow the money that you have saved over the years (or in the future) at a faster pace to help you achieve financial independence at an earlier age.
If you are just starting out with investing, you might want to consider a financial planner to help you achieve your investment goals.
As you start the new year, you have new life goals that you are looking to achieve in the upcoming year. Things might also have changed from the previous year (e.g. expecting a new kid) that have a life changing impact. Thus, it is important that you start the year off by doing one of the most important thing: Review your insurance plans. (P.S. This is where you take out your insurance plans that have been hiding in your cupboard and wipe the dust off them).
One of the most critical thing to do is to make sure that you cover all your insurance gaps. For example, if you are just heading into the first year of your adulthood, you need to consider putting in place basic insurance plans that will cover your (potential) medical expenses. If you are expecting a new child this year, you need to make sure that your insurance coverage is adequate given your new dependent.
Want to find out whether you have an insurance gap? Check out this article: How Much Should I Spend On Insurance Per Month?