While it's great to invest in ourselves, we should also remember to invest in our future. Sometimes, in that long list of resolutions, we forget to include our financial milestones. In this article, we share with you how you can prepare financially for 2017.
1. AnalyzeThe first step to change any behavior is awareness. Analyze your spending habits vis-a-vis your monthly income.
Are you "short" on cash? Are your credit card debts too high? Are you earning enough but still have money shortage?
Ask yourself, how's my finances? If you find something that’s stopping you from being financially stable, then it’s high time to ditch that spending habit to be on your way to becoming wealthy.
2. Don't save to save, save to investA common mistake many of us make is saving just for the sake of saving. Who wouldn't want to see their bank accounts grow bigger and bigger in time, right?
Unfortunately, keeping your money stagnant in a savings account won't do much in the long run. If you want your money to grow prominently, save to invest. Whether in stocks, bonds, or mutual funds, these investments can help you achieve financial security.
But, like all things in life, keep in mind that high reward often entails high-risk investments. Don't jump into investments if you're not sure how it works. Here's a library of investment articles to help you learn more about the trade.
3. Cancel underutilized subscription plansWhen analyzing your current financial situation, observe how much of your income goes to subscription plans. Look into your monthly bill and identify whether there are any that's underutilized.
You don't have to cancel all your plans at once, but at least make an effort to cancel any that's not giving you a good ROI.
Take for instance gym membership. When 2016 came in, it might have inspired you to commit to a weekly fitness routine. However, as the year progressed, social gatherings and responsibilities got in the way. So, if you're hitting the gym once a month or a year, maybe it's best to opt for walk-in sessions.
4. Cook at homeDining out can be an expensive habit to have, especially if you do it very often. Eating out once or twice with the family can be considered recreational, but if you're doing it weekly or daily, the habit can easily break your bank account.
Restaurants are in the food business. This means, any dish you order has already taken into account the cost, profit margin, and inflation costs. The more you opt for home-cooked meals, the more you save.
5. Find other sources of incomeWarren Buffet, an American business magnate, have always shared the principle of having multiple sources of income because depending on one can be a huge risk.
What happens if you get laid off? Or if the investment doesn't work out? What if you get sick or something unexpected occurs?
Having multiple sources of income creates a safety blanket to keep your finances secured. You can venture into putting up your own business or even as simple as online pawning.
6. Set a goalAre you familiar with the 80/20 rule? This is where you should save 20% of your income while leaving conservatively 80% for expenses.
If you don't set a goal, you could end up lost in a pile of expenses and purchases. It could be as simple as saving P1,000 a month, which, in the long run, would yield a huge amount of savings you didn’t know was possible.
7. Don't be afraid to askFinances can be a sensitive topic to talk about with friends or family, but if you're unsure how to manage your savings, try talking to professional financial managers. They can help you evaluate your investment risk comfort level or which assets suit your current situation best.
As the New Year comes, don't just think about improving your fitness, skills, or talents. Take the time to appraise how you can keep your future secured. At the end of the day, your future self will surely thank you for it.
About the Author:
PawnHero.ph, the very first online pawnshop in the Philippines. A writer at heart and a social media enthusiast, she finds personal finance, investment and money matters interesting topics to write about.
*Photo Credit: Miguel Angel Pintanel Bassets (Creative Commons)