New Year resolutions are often made after the New Year has come and gone, with no real planning put into place. One of the most popular resolutions relate to money as intentions to save more or pay down debt run strong. However, with less than a month to go until the New Year, now is the best time to start thinking and planning your finances for 2015.
While wanting to save more or pay off existing debts are worthy pledges, it’s important that you make specific goals in order to grow your wealth. For example, consider a resolution to contribute more to superannuation or research whether you’ve got the best rate on your mortgage. Additionally, challenge your children to develop good saving patterns in 2015 or resolve to invest some time towards better educating yourself about saving and investing. Above all, setting a clear goal is critical for the success of any resolution and talking about your goal with others can help ensure you will actually follow through on your promise.
Our top New Year’s resolutions for a wealthy 2015 are:
- Establish your goals
The best thing you can do when setting your financial New Year’s resolutions is to think ahead to December and start with what you want to achieve by the end of the year. That way you are giving yourself a timeline and you are able to adjust your budget or behaviour accordingly in order to meet that goal. For example, your goal may be to go on an overseas trip in a year’s time. Therefore, your action could be to save an extra amount from your budget each week or to make an investment that will give you a level of income during the next 12 months to ensure you have enough money at the end of the period to pay for your holiday.
- Converse about your goals
Our experience suggests that people who talk about their goals and resolutions are more likely to achieve them. Share your key resolutions or goals with someone you trust and respect and check in with them regularly throughout the year to let them know how you’re going. Some people even take to writing about their goals on a social networking site or blog; this way you are kept accountable, whilst having the support of other like-minded individuals will help to keep you motivated.
- Check your financial health
Many people resolve to join a gym or get a full body test done by their doctor in order to check and improve their overall health; the same can be advised for your finances. Set up a time to undergo a financial health check. Review your spending patterns to see where you can save more money; commit to saving a certain amount each month; if you have a term deposit, look into other investments such as corporate bonds that might give you a better return while interest rates are low; conversely, check your mortgage rate to make sure you’re getting the best deal. A refinance may be in order and it’s a great time to lock in low interest rates. Visit our brokers over on CSM for more information. Consider making an appointment with a financial adviser to really put your finances through their paces.
- Don’t forget about your superannuation
Don’t just commit to saving more for a rainy day. Commit to contributing a little extra to your superannuation in 2015 so you have more money come rain, hail or shine in the years to come. Through the power of compound interest, adding extra dollars to your superannuation now will mean having so much more to fund your lifestyle when you retire. The New Year is also a great opportunity to review your investment options so that you have the appropriate mix of growth and defensive assets in your portfolio for your stage in life and in line with your goals.
- Teach your children
If you have children, the time to teach them about savings and investments starts now. Endeavour to improve their financial literacy and get them into the habit of putting away savings from their allowances. Encourage them to set their own financial goals and help them map out a plan to reach them and then reward them when they do. After all, the savvier your kids are about money now, the more it will help you down the track.
- Invest in yourself and read widely
With the internet growing more each day, financial education is becoming more and more accessible. By investing in yourself - even if it’s just making time to learn more - is one of the best ways to help you achieve your financial goals. There is a lot of valuable information available online (often for free) that is literally sitting at your fingertips, as well as available offline information for your benefit. So consider adding a few wealth management websites, blogs and books to your holiday reading.
- Don’t leave it too late
If you have big long-term goals that require a lot of money, don’t wait a couple of years to start working towards them. For example, if you would like to retire at a certain age, your resolutions should include determining how much you need to contribute to superannuation and then understanding what investment strategy you should have in place.
- Have fun
Whilst most wealth-making tips will often default to preaching about retirement, it’s important to remember that it’s not all about saving money now to only spend it when you’re older. Make sure you include some fun or satisfying short-term goals in the mix to reward your good behaviour and keep you motivated to achieve your longer-term goals.
For more information on how to build wealth for the New Year and years to come, contact Steve Lockwood on 02 9299 7044 or via email@example.com