It’s beginning to look a lot like New Year! This is the time to set your New Year’s resolution. Regardless what kinds of resolutions that you’re trying to make, the key is actually not making the list, but how to stick to it.
Here are five ways to increase your financial fitness and make your New Year’s financial resolutions even better.
1. Calculate your net worth
Before making your financial resolutions, you should first calculate your net worth. Plus, New Year would be the best time for you to assess your financial health and plan your way to reach your financial goals. By identifying the assets and liabilities that you own, you will be able to see how much you have utilized for spending and saving, and recognize the aspect that requires changes.
2. Earmark your savings account
It can be quite tempting to spend money that you can easily attain. To ensure that your goal is achievable, it’s important to allocate a certain amount of money earmarked for savings that has no easy access for you to withdraw. That way, you will not easily drawn to spend the money that you want to save and gradually guide you to renew your yearly goals effectively.
3. Rebalance Your Portfolio
Every year you may earn a different return that resulting in a weighting change for the market value of each security within your portfolio. By doing portfolio rebalancing, you are able to keep your risk levels in check, lessen risk, take steps to lock in gains from the sectors with the best returns and purchase shares in the sectors that have lagged behind last year’s leaders.
4. Pay Down Your Credit Cards
Before your credit cards debt gets out of control, try to tackle it one step at a time. Determine the amount of debt that you can afford to pay off during the year, and try avoid from charging additional charges on those cards while paying off the debt.
5. Create a budget for life
Last but not least, create a budget for life and your net worth statement so you can build the road map to reach your financial goals. Keep in mind that your yearly savings and investments will eventually lead to a rising net worth over time, thus the importance of monitoring your cash flows.
Nevertheless, the resolutions that you make for 2020 will not turn into reality if you let yourself to be trapped in the planning process. You need to walk the talk and make progress. Just as the saying goes, a river cuts through rock not because of its power, but because of its persistence.