Saturday, January 25, 2014

Actionable New Year's Resolutions on Personal Finance

Its a brand new year, and everyone hopes for a prosperous start. Jumpstart your goal to achieve financial freedom by learning to adjust your spending habits.
Bear in mind: you need to actually do something to be able to achieve something. If you really want to see results, it would mean a complete lifestyle change most of the time. Learn to focus on your needs over your wants.

To improve your personal finances, here are some habits that you might want to pick up and include in your New Years resolutions for 2014:
New Year Resolution Finance
Save before you spend.
The key to saving more is to simply prioritise saving. Spend what is left after you have set aside a percentage of your income for your savings.  The usual habit is to pay our bills and go shopping when we receive our paycheck—and only then do we save, given there’s anything left at all.

It will make a great difference on your personal finance if you do it the other way around. Make it a habit to save a portion of your income as soon as you receive your paycheck, then budget what’s left for your personal expenses and other financial obligations. By saving first before you spend, you teach yourself to adjust and curb excessive spending. 

Aside from a deposit account, there are other places you can put away your savings and let you earn some profit. If you dont have a need to access your savings fund for a period of time, you can explore options like bonds, stocks, and time deposits. Typically, the longer you dont withdraw funds, the more interest you gain. These are a few ways to let your savings grow interest over time.

Delay gratification.
Focus only on what you need today, and wait a little longer to treat yourself. Develop the ability to resist the temptation of giving yourself a more immediate, albeit smaller, reward, knowing that you are due to receive a larger, more enduring reward later on. Practicing delayed gratification involves a lot patience and self-control but then again, you can take comfort in knowing that you are due to receive a much more meaningful reward if you dont give in.

If you really want to have your dream house, be able to save more, or be debt-free, there is no better day to start than now. Think about how much you save if you postpone buying a new pair of shoes, going on a night out, eating out in restaurants, and other unplanned purchases. You will find that you will get better at controlling yourself the more often you do it.

Surround yourself with positive people.
It will be also be helpful if you surround yourself with people with the the same goals as yours. Never tell your story to people who you think will distract you from what you want achieve.

If you have read or watched Confessions of a Shopaholic, you’d have met the protagonist who’s addiction to credit card shopping resulted in her being buried deep in debt. When she finally had the courage to turn things around, one of the things that helped her was a support group where she was able to meet people who are also trying to deal with the same problem. 

Its better when you spend time with people who share the same sentiments, failures, and aims, rather than make the journey alone. Tell your loved ones or friends about your financial goals and they will be the ones to inspire you and boost your motivation. If you can afford it, attend seminars and simple meet ups, or find a support group online.

Remember these three tips as you begin the new year. They may not exactly be easy to apply, and you may not see results in an instantbut if you are reading this, it means that you are willing, if not eager, for a change in your life and want to improve your financial condition. Thats already a good start. You just need to stay focused and never give up.

This article is contributed by Michael Vincent from Money Hero, Hong Kong’s up and coming financial comparison website. Users can compare a broad range of financial products like credit cards side by side, thus enabling them to create better financial decisions in their lives.

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