With 2014 coming to an end, yet again we are gearing up to welcome the New Year. New Year brings along with it a tradition of making resolutions where we resolve to do or not to do certain things.
We all work to earn, to make sure we have what we want. Right isn’t it? But when we have money, that’s where the real problem starts. This year let’s resolve to do few common and simple things to get our financial house and life in order.
1. Think before you Spend
In this era of consumerism, mostly we land up buying things that are either of no use or minimal use to us. This urge, if controlled can save a lot of money which can be used to spend on our current and future needs.
But often we get into conflict of distinguishing between a need and a want. The solution to this conflict is a simple exercise of “Think before you buy” i.e. give it a thought, whether you actually need it or not. If this does not works well for you do a TEST 21. All you have to do here is postpone the purchase for 21 days and if after that you do not feel the same urge to buy, you don’t need it anymore.
2. Look where you want to go
Break down you wish list into specific goals. Goal setting helps you to know what you want to achieve and when. Knowing what you want your money to do for you, gives your goals a better chance of being reached whether it is emergency planning, a foreign trip or a house or retirement.
3. Save Small – Save Regular
As they say to manage your finances, you don’t have to be smartest from the rest but you have to be disciplined from the rest. Once goals are set, you may start small but save regularly. The road to your long term goals may have many jerks but don’t stop until you arrive at the destination.
4. Stay Simple – Stay Foolish
Often it is believed that a lot needs to be done to manage finances effectively whether it is monitoring fund performance or buying new products. In pursuit of high returns we end up complicating our finances by doing too many things. To manage finances effectively all you ought to do is to stay simple and stay foolish i.e. unperturbed by the innovations that people come up with which are just a makeover of science of investment. Remember, complex things are easy to do but simplicity is the real challenge.
5. Plan your Golden Years Today
Retirement will be the most difficult financial goal that we will have to face but alas not many of us are realizing its importance. Long life, high healthcare costs and lonely retirement are the biggest challenges of retirement that we refuse to foresee and prepare for. Stop procrastinating and commit at least 10% -15% of your income towards your retirement planning. It’s only you who will have to pay for your retirement.
Effective financial management is no rocket science but 99% common sense. Adopt these simple and common moves to bring your financial house in order and mind it, you will sleep a lot better knowing that.
