Procrastination is the biggest threat to your NY resolutions, and whatever they may be, don’t let them lie fallow any longer. Undoubtedly, increasing your wealth is among your New Year resolutions and to ensure you are on the right track, here are 6 resolutions for financial success in 2014 and beyond.
1. Know your net worth
The start of New Year is a good time to calculate your true financial worth. This is a key step towards assessing your financial health, as well as planning your financial goals.
To find out your net worth add together your total assets, investments and savings, and then minus your total liabilities and debts. An effective financial plan should increase your net worth each year, so repeat this exercise at the start of next year to know how well your financial plan fared. Why not use our GVS tool to find out.
2. Plan to reduce debt and expenses
Your debt-to-income ratio should ideally be less than 36%. When creating your financial plan this year, factor in your total debt and look to reduce it as much as possible with existing savings and income. If you cut down on expenses and use the additional savings to pay off debts this year, your net worth will increase correspondingly next year. At all costs, try to avoid the crippling effects of unsecured debt.
3. Increase savings
A reduction in expenses is bound to increase savings. You may think it’s easier said than done, but if you set specific targets, you are more likely to achieve them. A minimum 10% (ideally 15% to 20%) of your income this year should go to your savings account. If you saved 10% of your income last year, better it this year. Why not save what you would have been paying in taxes back home!
4. Invest to protect yourself
The best way to ensure continued financial success is to plan ahead and invest in the future. Start contributing towards an emergency fund, invest in retirement plans and review your medical and life insurance policies. The earlier you start taking an interest in your money, the longer it will look after your interests.
5. Stay informed about your finances
This year spend some time educating yourself on financial topics and keep abreast with financial news and information. Take time to monitor your accounts, budgets, and investments every quarter and review to align them with your financial goals. GVS helps massively and if you want more reports from us, just let us know.
6. Seek qualified advice
Financial planning is a tough subject, and it can sometimes be overwhelming to manage all your finances yourself. A qualified financial adviser can work with you to understand your financial situation, and plan a future course of action based on your goals. There are a myriad of financial products available out there – a qualified planner can help you select the right ones according to your needs now and for the future.