Happy New Year! We are all starting fresh with the hope of perfect clarity and “vision” in the new year and decade. As a result, we thought we would put forth our compilation of 10 Financial Resolutions for Success as we ring in 2020. Whether you are 20 or 80, you can benefit from the following financial resolutions. Please consider the following list. You should be proud of the ones you are already doing and then pick a few to work on through the course of this year.
1. I will learn my spending habits
First step is to figure out what your take-home pay is (after-tax income). Then look at your credit card statements and recurring expenses. How do you spend your paycheck? What trends can you see? Find opportunities to save more by eliminating unnecessary expenditures.
2. I will create (and try to stick to) a budget
Find a budget that works for you. About 50% will go towards needs (think: housing, food, healthcare). The other 30% will go towards discretionary spending like entertainment or shopping. The last 20% can be invested or saved. This is the 50-30-20 Rule, which is used as a guideline to find a budget that works for you.
3. I will invest in my retirement
Retirement might feel like a lifetime away but starting early and utilizing the compound returns effect is key. Take full advantage of your 401(k) or IRA opportunities.
4. I will pay off all (or a good chunk of) my debt
By paying off debt, you will be able to save more. The sooner you do this, the better off your wallet will be. Do not be frightened! If you make a plan (and dedicate yourself), you can execute it!
5. I will schedule time for professional help
Meeting with a financial professional is very important for long-term goals. You can make sure to stay on the right track by scheduling thirty minutes to an hour with a financial professional once or twice a year.
6. I will generate side income
After you have maximized your investing, creating additional sources of income can help you achieve your financial goals like paying off debt and building your net-worth. Whether you walk dogs, sell your clothing, or give guitar lessons, picking up additional income can be a wonderful financial resolution.
7. I will stay curious and learn more
Succumbing to information overload is too easy. Start slow by subscribing to a podcast or newsletter (the Skimm is one I read most days). Learn about the markets and investment vehicles like mutual funds and ETFs (what they are, why and how they move). You can even follow news headlines by social media (Twitter).
8. I will connect with others about money
Don’t be afraid to talk about money. Most people think of money as an awkward subject but it does not have to be. Choose someone to talk with about this and schedule the time to do it. This way you will both be accountable for creating and reaching your financial goals (just like having a gym buddy makes you more accountable to reach your fitness goals).
9. I will donate to a cause I care about
Make sure to give back to your community. Statistics show that givers feel a higher sense of gratitude, appreciation, morale, wellbeing, happiness, a greater purpose in life, and naturally lower stress levels. If you are tight on cash, you can still donate your time.
10. I will enjoy my money
Remember to treat yourself! You have worked hard to enjoy the benefits of your money. Taking the steps to make a budget, to invest it wisely for the future, and to save enough for yourself will help you feel empowered with your money and achieve success in your life.
Pay It Forward
Don’t keep these secrets for financial success to yourself! If you know of someone in your life who could benefit from any of these tips, forward this on. The compound effect of one email being sent to 10 people is much like the compound effect of money over time. Small actions can have big consequences over time!
Midland Trust specializes in Self-Directed IRAs. This type of retirement account offers a great way to save for retirement by allowing investing in alternative investments like real estate, futures and forex, precious metals and notes. All gains inside of individual retirement accounts grow tax-free and there is no limit on how much profit you can earn.
Written by Eli Cooper, Client Services Associate