We all set new resolutions every year, but the problem is that we don't always keep them. One reason for this is because our resolutions are unrealistic, and we get discouraged after a few days or weeks. You may resolve to purchase ten more new stocks in the new year, but if you lose your job, this might not be feasible. Instead, you can resolve to add a few dollars to your investment account throughout the year and this would work better for your investment goals.
Start and Maintain an Emergency Fund
As the year 2020 has shown us, life comes with uncertainties such as job losses and health issues that can threaten your or your loved one's life. It is for this reason that one of the best financial resolutions is to start and consistently build your emergency fund. You can even automate the savings by taking a portion of your check every pay period and placing it in the emergency fund.
Look for Ways to Boost Income
While it's important to save as much money as possible, you'll also need to increase your income in order to achieve financial stability. Look for different online and offline side gigs that you can do to make more money. Speak with your boss about getting a raise and if this isn't possible, begin searching for a new job. Buy items at local thrift stores and sell them online.
Work on Improving Your Credit
You won't become debt-free within a year, but you can take small steps towards improving your credit. Start by looking over your credit reports and contact your creditors to figure out a flexible payment plan. If you're planning to purchase a home, don't apply for new credit cards or personal loans because it might affect your ability to obtain a home loan.
Adjust Your Budget
Sometimes it's a good idea to cut out unnecessary expenses in order to prepare for a better financial future. Cancel any subscriptions you no longer use. Call your cable company and request changes to your services that will make your bill cheaper. If your current cell phone bill is too high, get rid of unlimited data or even switch to a cheaper carrier. Turn off appliances when you're not using them to save money on electric bills.
Invest Small Amounts Throughout the Year
You don't have to invest half of your check or wait until you receive extra funds to invest and grow wealth. Even if you invest $20 or $30 every pay period consistently, you put yourself in a position to do well financially. And investing has gotten easier with apps such as Webull, Acorns, and Betterment.
Open a High-Yield Savings Account
Most traditional bank accounts offer some of the lowest interest rates, and this means you're not getting the best return on your investment. It is better to open high-yield savings account through an online bank because the interest rates are generally better. This is a neat solution if you're saving up for a home or vacation.
In conclusion, these realistic resolutions will assist you in reaching your long-term financial stability.