While December may be a great month to immerse in the festive season and look back at the year 2017, it is also the best time to look forward.
Studies and surveys have shown that out of all the New Year resolutions that are set, more than 90% of them end up failing. That does not mean we stop making them.
Setting financial resolution is a major step to giving your year a head start.
Financial Resolutions For Your Consideration For The Year 2018
Automate your finances
Take this short festive season to finally get down and set up those standing orders which you have been procrastinating.
Automating our finances helps create a stress-free, clear-minded environment which allows us to focus on meaningful financial decisions in the upcoming year.
Here are some ways to put automation of your finances into good use:
- Paying bills: Automatically deduct bill charges from your account with the use of GIRO prevents overspending, pays your bills on time and keep a good credit score.
That’s killing 3 birds with 1 stone! - Saving for rainy days: A good start to set up your emergency fund
- Automate your investments: More financial savvy users can look to invest their money using Regular Savings Plan or Robo-advisors.
Clear your debt
With each passing moment that you are in debt, is a moment that you are less happy than you should be.
- List down all your debts in order.
- Depending on your preference on the Debt Snowball Clearing Method or Debt Avalanche Clearing Method, go on to clear your debt effectively.
Make greater lifestyle decisions
The year 2018 should be the time to start cutting all your expenses on unnecessary spendings.
A good way to kick start this will be to review all your lifestyle decisions such as mobile plans, broadband plans to TV packages. Are you on the cheapest plan?
Below are some really good example to help you out:
- SIM Only Mobile plans and Corporate plans are usually cheaper than your contract plans.
- For 12 Months Contract, WhizComms provides the cheapest plan. For 24 Months it will be WhizComms and ViewQwest. Get the cheapest broadband plan according to your lifestlye today.
Pick up a hobby or start exercising
Fun fact:
- Analysis shows that employees engaged in a creative hobby performed between 15% to 30% better at work.
- Employees who keep themselves physically fit tend to do better at work. This is due to regular exercising helps improve concentration, allows sharper memory, faster learning, increases mental stamina and reduces stress.
By keeping fit, both mentally and physically, it also reduces the frequency of visits to the doctor. That is extra money saved on medical bills!
Get sufficient coverage
List down all the insurance policies that you are currently paying for and really look at it this time.
Most Singaporeans have little idea about what they are covered for despite paying for their insurance policy.
For those who have yet to get their coverage, it is about time to do so.
Start tracking your expenses
It is proven that simply by looking at your spending habits regularly, one will have the tendency to save 30% more in a year.
If you are not really an excel sheet and mathematician kind of guy, feel free to let technology help you with it. Seedly is available for free with no in-app purchases.
Read one personal finance blog article every day
The best investment comes in form of knowledge.
We are fortunate to have information made available to us readily.
I personally suggest reading one personal finance blog article each day, on the way to work. My personal favourites are Investment Moats,Ā Dr WealthĀ and of course, Seedly’s content.
Further Reading: Making Sure Your Financial Resolution Sticks
We picked the brains of our Seedly’s Personal Finance Community to find out what are some of the tips to planning their yearly finances. Below are some of the best answers!
Kah LokĀ shares his B.E.S.T method:
B: Best
Set goals that scare you a little, but refrain from ridiculous targets you don’t even believe you can hit. If you conquer the belief, half the battle is won.
E: Eye-ball
Eye-ball means putting your goal where you get to SEE it everyday and to constantly remind yourself.
S: Script
Script refers to writing your goal down on paper instead of just thinking about them in your head. Writing brings clarity, and clarity is POWER.
T: Timeline
Set a timeline to your resolutions and be specific. E.g. I’m earning $100,000/year of passive income from my reits by 31st Dec 2018.
Rave Ong, on the other hand, has a S.M.A.R.T goal setting method:
S: Specific
Your goals have to be specific, like say 10%, or $1000 per month savings, etc etc.Ā
M: Measurable
A: Achieveable
One cannot control the markets or investment instruments. So focus on what one can
R: Realistic
Your goal have to be achieveable. Do not put goals like, save $10k every month when monthly income is less than $10k.Ā
T: Timeline
How long do you need to achieve it?
Add-on:
Set the goals according to your own requirements. Your closest friends, family are not you, so do not use their standards as the basis point.
I would set THREE different goal levels for a start, so as to gauge myself. That way, the goal that is to be set at the start of next year would be more motivating, rather than for it to collect dust.
Vanessa Ng believes in havingĀ the year end bonus in mind.
This can be kick-start by deciding on the different investment types that one wishes to diversify his portfolio with.
Allocate a small portion for the riskier investments such as cryptocurrencies and put a limit on how much youāre willing to lose. This makes investing less emotional.
Set a separate monthly savings target should one plan to buy big-ticket item. Having a buffer of liquid cash for sudden, unplanned investments is quite important to me because you never know when an opportunity will come.
Beyond that, setting aside a budget for self improvement is an important investment too. It can be learning a new language or a new skill such as painting or driving. Sharing all these with a friend or your partner helps to keep you accountable because the drive tends to fade with time.
