If you feel tired of worrying about living comfortably in the future, or are scared that you won’t be able to afford the kind of lifestyle you really want, now is the perfect time to make a resolution to save up as much money as possible and really invest in your future.
You might not have taken your New Year solution seriously, but the recent event of the coronavirus pandemic is an example of how quickly things change. Curfews and lockdowns have also shown people the importance of having a financial cushion to fall back on if they can’t afford to go to work.
Learn from the experience, take a vow to stick to your financial goals throughout the entire year until they become habitual.
Create a Budget Every Month
Take note of all your spendings and your net income to create a budget and do it before the start of every new month. While it may seem easier to stick to one plan every month instead of making a new one twelve times in 2020, the upside to creating a new plan for every month is that you can adjust your expectations and plan accordingly.
Writing out a budget every month will keep this goal fresh in your mind, and that can only make your resolution stronger. If you’re unable to stick to your budget in any specific month, figure out what went wrong and how to mitigate the situation while also making plans to prevent something like that from happening again. Make notes for yourself on how to improve and what expenses can be modified or sacrificed for the sake of the goal.
Make a Debt Payment Plan for 2020
The longer you stay in debt, the more money you end up losing in the long term. It’s a financially sound choice to get rid of debt as quickly and efficiently as possible. If you think you can manage to pay off all of it within 2020, you can be debt-free before 2021!
However, that may not be possible for you with your current income and the amount of money you owe. Fix the amount of debt you want to clear off this year, then figure out how to split it between all the months. Make a concrete plan to reduce your debt in 2020 and stick to it.
Invest in a Retirement Fund
You should dedicate at least 5% of your net income every month to your pension fund. If you’re free of debt or feel financially secure, you should increase the amount to 15-20% of your monthly income.
Even if your company contributes a significant amount, your goal should be to have enough money in the retirement fund that you can live in luxury once you have retired from work.
Track All Your Spendings
For the first few months, make notes of every single expenditure on your phone or on paper. Every expenditure, big or small, should be written down somewhere so you can go through it whenever you want to.
This will help you avoid unnecessary expenses once you notice how much money is wasted on frivolities. This is a great way to develop better spending habits and can really help you save up a lot of money in the New Year.
If you’re able to achieve these goals by the end of the New Year, soon you’ll have the financial independence to buy your first home or a new car, or even invest in your pension plans and finally take that trip overseas as you’ve wanted to your whole life.
Or you will have enough to survive an emergency or even a pandemic. Every situation in life is meant to teach us something. Being financially sound is one of the many lessons that people are learning from the COVID crisis.