With a new year beginning, we find ourselves in the second half of Financial Year 2020-21. Despite this, it is never too late to get into new (and improved) financial habits. Here are 7 quick-tips that you need to have a financially-successful year.
1. Establish ‘why’ you want to be successful financially:
Do you want to spend more time with your family and less time working? Do you want to pay off debt? It is vital that you know exactly ‘why’ you want to be financially successful. Your driving goal can be achieved through a range of channels that would be specific to that particular goal.
2. Set Financial Goals:
Your goals should be SMART – specific, measurable, achievable, realistic and time-bound (Smart Money Mamas). Once you have these goals in black and white, it is important to stick to them. Discipline is key in any financial goal-setting plan.
3. Tracking Your Progress:
This is where a budget can come in handy – it gives you the ability to track what is coming in and what is going out. It is also good practice to cross of goals as you complete them – a good tool to keep you motivated when you are discouraged.
4. Cut Expenses (where you can):
This is easier said than done, but a new year gives you a new opportunity to think about your spending habits. From looking at a budget, have a look at where you have a habit of overspending – a cut in spending means a cut in saving, and this will be extremely beneficial in the long-run.
Saving is crucial for emergency situations. This is purely what a savings account can be used for if you want to grow any wealth, but saving is also important for other goals (such as buying a property).
6. Handling Debt:
Debt, most of the time, has a negative connotation. While it is best to have no debt at all, there are occasions where debt can be good. This is especially where a financial adviser can be beneficial to steer you through the ins and outs of finance.
7. Invest for the future, not the present:
To enjoy your life later, plan now. Investing can be via shares or property, but it is important to be weary of the types of risk that both of these pose. In most cases, history has shown that these two assets have grown (past performance is not indictive of future performance). In linking back to an earlier article of ours, it is not crucial to ‘time’ the market (entering at a low price). What is important is holding an asset for a long-term period in order to see growth and results.