Making a long list of resolutions doesn't make sense when you don't keep them throughout the year.
If you fail to keep the resolutions, then you'll not see the desirable result.
What if you make some limited resolution that would improve your financial prospects? In my opinion, taking few steps will help to build the ability to do something better.
So, this year, make fewer financial resolution to remain focused throughout the year. What will be those financial resolutions?
Here you go:
1 Introduce yourself with a budget
Budgeting is one of the most powerful methods to improve personal finance yet most neglected subjects for many of us.
Some people don't have a budget, whereas some people lose their interest in following their budget within a few days.
This year, you must make a resolution to follow a personal budget. If you have already followed a budget, but didn't get any positive result and discontinued, then make it more realistic to remain focused.
Use a budget worksheet or app to create a budget according to your income.
2 Monitor credit report regularly
The second most important thing is checking credit reports on a regular basis, which most of the people don't give importance throughout the year.
According to research by the Federal Trade Commission, 1 in 4 people have errors in their credit reports. Most of the people think credit report always contains the correct information; it's a wrong concept!
Remember, mistakes in credit report can affect credit score negatively. Furthermore, reviewing credit report regularly allows you to identify signs of fraud before it gets too intense. So, if you don't want to give your valuable credit score a hit, then monitor your credit report on a regular basis.
In addition, you can order free credit report at ANNUALcreditreport.com and also monitoring credit is free in some authenticate websites.
So, this year, make sure you don't neglect your credit report; make a resolution and stay top of your credit.
3 Plan a suitable debt payment strategy
According to the NerdWallet’s annual survey on household debt, an average household owes nearly $16,061 credit card debt in 2016.
The cost of debt is also shocking.
It seems the debt load is truly a concern.
Now it's time to take action - make a resolution to get out of debt in coming years.
You may not be able to get out of it fully, but taking one step may make a big difference in the future.
There are many ways to get relief of debts. You just need to choose a payment plan to get out of debt little sooner that it would otherwise.
If you think you're financially unable to successfully follow up a debt repayment plan, then you may take help of a debt payoff calculator or a financial advisor.
This way, you'll know whether or not you're able to continue a debt repayment plan or how much money you need to dedicate toward the debt.
Those who can afford higher debt payments should start paying as much as possible to get rid of the debt sooner. Remember, the sooner, the better.
As soon as you pay off debts, you'll be able to save more money and secure your financial future earlier.
4 Automate your finance
Due payment and late payment are the main reasons behind your debts. Once you miss a payment, you start accumulating outstanding debts. Also, a late payment reported to the major credit bureaus can hit your credit score majorly.
So, in 2017, you must take care of your monthly obligations first before indulging in luxury expenses. This way you can be able to stay away from the clutches of debt.
If you often forget monthly bill payment dates, then set up automatic bill payment from a deposit account. This way, you can pay each monthly bills without taking extra stress.
5 Build up a financial cushion
Ignoring a savings or rainy day fund may put you at the risk of financial disaster at the time of extended unemployment or medical emergency. You must keep a financial cushion to support any financial need.
Life insurance, medical coverage, emergency fund, and retirement savings are all financial securities in different forms. You should have all these to protect your financial future.
Otherwise, you have to pay the sky-high bills of medical treatment or face poverty at the time of retirement. Unfortunately, lack of savings leads people to work until death.
Find out ways to save a certain amount. Cut down unnecessary expenses and start living within your means.
Open retirement accounts to save money for retirement. Opt for life insurance and medical insurance to stay away from piles of medical debt.
My recommended financial resolution list is short, just to make you more motivated. However, one more point I would like to add in the conclusion that is...
We can't deny the power of a better paying job. If your income is good, you can achieve more financial goals in the future. You can also stick to all the resolutions throughout the year with ease. Better pay scale also boosts confidence in taking small financial risks. So, if you feel you have the potentiality to get a better-paying job, then this year, give yourself a chance.
Don't be static in your career building path. Update your resume and skills; start applying for jobs in coming year. Your dream job profile might be waiting for you.