The beginning of the year is always a time of goals and resolutions. Everyone is brimming with endless possibilities, hoping to start afresh and make the most of the clean slate set before them. The euphoria of a new year usually has most people feeling that everything is possible and this year can be different from all others. A chance to change everything!
In all the goal setting and resolution making, financial goals are usually on the very top of everyone’s lists. We all know that our financial situation shapes the kind of year we have.
Financial goals range from getting out of debt, building up your savings or investment portfolio, increasing your earnings and earning potential, acquiring multiple streams of income and many more.
For some of you, you have had an excellent 2017 and you are even more motivated than ever to top your financial winning streak. For others, you had a terrible year or last few years, and you just want to get out of that and do better. For either one of these situations and everyone in between, financial success is not a mirage. It is not impossible. All you need, as you make your goals, are these tips to guide you into making them a reality.
Here are five sure tips to ensure that your financial dreams come true.
1. Create a zero-based budget at the beginning of every month to guide your expenses.
Planning is everything in financial circles. You do not need to dish out more money on a financial planner unless you are dealing with really complex circumstances. The key to zero-based budgeting is ensuring that every item on your budget is a necessity. There must be a need, reason, and justification for everything you spend money on. This might seem a little stringent now, but you will be thankful later. A lean budget today gets you a fat account tomorrow.
2. Begin or continue building your emergency fund.
No, this is not your savings, but it is as important as your savings. This will keep you from crumbling in the face of an emergency or crisis. It is a common saying now that most people are one big expense away from bankruptcy. You may find that in the face of serious health challenges, having to move, make a big purchase or anything that takes a ton of money from you; you are left practically broke. So, it is not just a saying. It is the reality of many individuals and families today. If you find yourself having to spend your savings when something big comes up, you would be right back where you started. So, dedicate as much to building an emergency fund as you would your savings. While you’re at it, build special funds dedicated to particular expenses, so your savings remain just that – savings.
3. Build and grow your savings and investment portfolios.
This is sure to have you feeling more secure, and we all know rich people are those who earn money even while they sleep. Keep a reasonable percentage of your earnings in the bank, earning interest and invest wisely in low/no risk opportunities. You do not need to get too greedy and make too much off this but at the same time, do not ignore the opportunities it may present.
4. Leverage technology massively.
Technology is practically the best thing that ever happened to this generation and this is even more so for savings. You can get technology tailored to practically everything. Budget apps, expense apps, fintech savings and investment initiatives. You need it, someone has thought about it and there’s probably an app out there for it. Don’t miss out on the opportunity to leverage technology for this need.
5. The mindset.
The most important thing in all of this is your mindset. You have to be disciplined, determined and committed. All of these tips are as successful as the mind that implements them. That’s the greatest key to your financial success this year. Don’t waste it.
See you at the end of 2018, smiling I’m sure.
About the Author:
Edwin runs the personal finance blog, Cash The Checks. Since 2006 he’s not only written about saving and making money, he’s been doing it. Edwin enjoys sharing his personal experience in improving money habits and achieving financial freedom and helping others do the same.
Could you please instruct me or aim me to how do I get a complete break down on income &expenses broken into categories for the last year. Not a graph, but a print out of each allocated expenditure &income source.
I’m still struggling trying to understand banktivity6 but, hopefully, things will come clear soon
I started practicing most of these five almost 30 years ago. They have served me and my wife and family well. Now that my wife is disabled and requires round-the-clock care in our home, I’m mighty thankful to have practiced them. Our portfolio has increased by 8.6% from 2006 through 2017. And it’s still increasing slightly this year too. So, my recommendation is that you practice these five, adding your own personal preferences, and watch the years go by!
These are great reminders (and timely). The year is flying by, and I’m a little off on my software use. I’ll keep trying!
I am struggling with banktivity 6. How do I set up my portfolio ? Why does the bankcard have to be entered EVERY time?
Hi Karsta, it’s hard to know what’s going without more info. If you can reach out to our support team I am sure they can get things going for you!
I’ve just completed my first full year under Banktivity. Entering transactions by downloading is fabulous! I’ve reduced my workload entry by 95%! Nothing is totally easy but Banktivity certainly has helped me immensely. So, one of the purposes of B. was to aid in doing taxes. My wife has an independent music studio and requires a lot of bookkeeping proess to get the biggest refund. So far, “B” has also helped tremendously in this area too! It has several “not so obvious tricks” that have helped me also. I RECOMMEND “B” WITHOUT RESERVATION!
I’m a long time proponent of practices like these. However, I suggest that the first one (monthly budget) is not realistic. Doing a monthly budget is a good idea, but only if you look at each month as a piece of a 12 month annual budget. There are too many income and expense items that fluctuate over the course of 12 months. For example, your insurance payments might be quarterly or vacation travel might be twice a year. You need to see the BIG picture and refine it down to each individual month. It’s not hard, but it does require doing a spreadsheet.
Banktivity 6 has wonderful pre-designed reports for looking at your income and expenses over 12 months. However, I find it is best to create a separate 12 month budget spreadsheet and use it to compare budget to actual. Most of all, be sure to update your monthly budgets as they occur so you have an accurate “running” picture at any point in time during the year as to how it is likely to play out by the end of the year.
Good point Mac. Have you looked at Banktivity’s “Irregular Budget Interval” feature? It’s designed just for those types of expenses, and described in this article: https://www.iggsoftware.com/blog/2017/10/banktivity-6-tips-and-tricks-how-tos-and-best-practices/