What’s the best financial resolution I can make for 2019?
Improving our personal finances is always a popular New Year’s resolution, given the large role that money plays in our lives. But there isn’t a one-size-fits-all resolution you should follow. Here are the top three areas I believe are worth focusing on. You don’t have to adopt all three, but challenge yourself to work on one and make 2019 your best year yet.
Know where you stand.
Before the clock strikes midnight, you’ll want to put together a personal balance sheet so that you know where you are financially. Write down the value of your home, bank accounts, investment accounts, credit card balances, mortgage and salary. Use this information to motivate yourself to improve your standing in a particular area. Maybe you want to pay down your debts in 2019 to save more money or ask your boss for a raise this year. Whatever your goal, you’ll be in a better position 12 months from now if you first know where to focus today. Thinking of hiring a financial advisor? Here’s what you need to know.
Review your credit card and bank statements.
While you may not want to look at your December credit card or bank statements given how long they could be, take some time to review your monthly statements to check for areas where you can save in 2019.
- Search for any recurring monthly payments (subscriptions, memberships) that you may have forgotten about but are still paying for. Start the new year off on the right foot and cancel them so that you don’t spend another year paying for a service you don’t use (like that music streaming service you forgot about!).
- Look at where you are spending your money and how much you are spending. You may know that you spend a lot of money in a certain category every month, but when you actually put a dollar figure to it, it can become more real. Use this information to make a resolution for yourself to be even more mindful of where you spend your money next year.
Put money aside for a rainy (snowy) day.
We all hope for a healthy and prosperous New Year, but unfortunately job loss and family illness can unexpectedly affect any of us. And if it does, it can be a little easier if you’ve set aside money for an emergency. Using the knowledge that you’ve gained from reviewing your account statements and spending habits, try to put a little money aside from each pay cheque going forward to build up enough savings to cover your expenses for three months. It may take you a couple of years to save this money, but if you ever do need to draw on it, you’ll be thankful that you started 2019 off by creating an emergency fund. Next, don’t miss these 5 smart investing tips to help you save for the future.