Financial Resolutions for 2019. A new year is a good time to make some resolutions to improve ourselves. Finances are no different. Thus, if you want to become more financially savvy, here you have some new year’s resolutions you may want to consider.
1. Keep a record of what you do with your money
It is very likely that if we ask you what you would suggest to a new investor you were advising, you would say that this person should keep himself informed about what is going on in the markets. But then, when it comes to our own finances, we do not follow such basic advice. Do you really know where your money goes?
A notebook or an Excel file will help you understand what you are doing with your income. You may think that you are someone who controls your expenses; however, if you see what you actually do with the money on a spreadsheet, you will have a much more objective overview that will allow you to reconsider some things.
Stop trusting what’s in your head and start trusting the facts stated on paper. You might get a surprise.
2. Review expenses regularly
Just by following our first piece of advice, you will likely be reviewing your expenses when you check your records, but it is a good idea anyway to do a deeper review each six months. Try to identify expenses that are not necessary, beginning with subscriptions that you are no longer using and cancel them. Do not be romantic about this. If you do not use a service, do not keep paying for it. Small amounts mean big sums in the long-term.
3. Diversify
Anytime of the year is a good time to reduce risks. Even if you are a successful investor, you don’t want to put all of your eggs in the same basket. Crises appear suddenly and take away a lot of value, so you better be ready in advance. Research new types of investments and try to keep your money as safe as possible by investing in assets that are not correlated.
If you have bought some real estate properties lately, do not invest in real estate stocks.
4. Review your insurance
Needs change over time, and what was good when you hired your health/life/car/etc. insurances may not be accurate for your needs now. We are not saying that you should lower the insurance payments. Maybe after the review, you may decide to increase them. What you need to do is check them.
5. Get rid of debts
If you are able, try to get rid of your debts or at least those with high interest rates. For example, if you have credit card debt, you may consider asking for a loan with lower rates to pay off the credit card debt, so in the long term you will pay less interest. Try to use your debit card more and avoid credit if not necessary.
6. Make a will
Making a will is something cheap that is very worth the money. Maybe you won’t benefit from it, but your family will. And taking into consideration the amount of time or money needed, we highly recommend it.
Good luck with your Financial Resolutions for 2019.