As the clock hits 12, marking the end of a decade and the start of a new one, the one thing common to many of our resolutions is more attractive finances and financial independence! What seems like such a daunting task is actually easy to achieve if you follow these 7 steps.
1. Realistically see where you stand
You need to take a good look at your savings, debts, and investments. As stressful as it may be, overcoming denial and setting realistic, attainable goals is a good head-start to attaining financial freedom. We can provide you with a cash flow analysis to see what your current financial situation is.
2. Create a budget and strictly enforce it
This is perhaps the most valuable thing you can do, but you must be realistic. Take into account your total current expenditure, including things like rent, food, utilities, etc.
3. Pay off Debt
Debt can be one of the biggest obstacles in your journey to financial independence, as interest pockets all your money! Be sure to pay off your debts so you can save money which you can later invest.
4. Plan for old-age
Time stops for no one and retirement is inevitable, so start preparing! You need to calculate exactly how much you need to retire and plan accordingly. The most common rule to save for retirement is about 15% of your gross income. This can be done by opening an account today.
5. Organization is Key
Making goals and budgets for yourself is practically worthless if you don’t plan to stick to it. Therefore, good organization is very important in achieving the goals you’ve set out. You can never be too organized, so the more, the better! Be sure to check up on your retirement plan every year and update it as your life events change.
6. Create an Emergency Fund
You never know when an emergency might arise and without a good plan, your budget could collapse. Creating an emergency fund will protect you against unforeseen circumstances without sending you into overdrive with panic! For individuals about 6 to 12 months of your current income is recommended and for business owners about 18 months.
7. Evaluate your investment accounts
Already investing? That’s a sign you’re going the right way, however, chances are you are not making the returns you could be, make sure you are aware of how much fees and expenses you are paying. You will need to update your strategy as your risk tolerance changes or communicate with your financial advisor.
The New Year is a great time to do some research into investing, so you maximize returns while taking less risk.
This time of year is beaming with possibilities. What is on your agenda for the New Year? Take into account your financial goals, and use these steps to achieve them!
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