It is time to acquire new financial habits that will definitely come in handy in the new year.
1. Start tracking income and expenses
In order not to spend all your money in the holiday season, start to control your expenses and income. This can be done using financial planning services, a simple Excel spreadsheet, or in a notebook.
Taking into account expenses and income will help you understand where the money is being spent, what expenses could be avoided, and how much you could save from your salary for a major purchase.
And no matter how chaos reigns in your finances, it is never too late to fix the situation.
2. Learn to say no to pointless spending
All of us, at least once a year, is guided by “super-profitable deals” and spend money on things that will not really bring any profit or joy. But there are a few tricks you can use to counter this marketing trick:
Take marketing campaigns seriously. Most of the time, sales and promotions are a way to get you to buy at a discount what you don’t need at all. The “Two for the price of one” brand, of course, appeals to the inner curmudgeon, but maybe you don’t need it at half price.
3. Follow your financial plan
Do you dream in the new year of finally saving for a car or a down payment on a mortgage? Without a well-thought-out financial plan, it is much more difficult to do this: from time to time you will be tempted to spend money on trifles and, as a result, you will lose your financial course.
Start by making a list of your top goals for the year. For example: buy an exercise bike, do a long-awaited repair, and buy a car. Immediately indicate the quantities you will need to fulfill these wishes.
Then assess your capabilities: what income and expenses you have, how much you can save per month. Think about whether you can put off all your dreams at once or whether it is worth prioritizing. You may need to cross something off the list – you won’t survive another year without repairs, and buying an exercise bike can wait.
4. Get a financial airbag
In the new year, you want to believe only in the best, but no one is immune from unpleasant surprises. To avoid being disturbed by a sudden layoff or other force majeure, start creating a financial cushion that will equal multiple salaries.
To do this, try to set aside part of your salary every month, for example, 15%.
It is better to deposit this emergency reserve in a bank. Interest will be charged on your savings and you can make up for inflation losses. Also, the money from the deposits is insured by the state.
5. Handle debt with care
Of course, you would not like to celebrate the New Year with debt. But this is not always possible. If you don’t have time to pay the loans, you can at least try to review their terms. For example, combine all the loans into one and refinance it.
If you are only taking out a loan, first assess whether this money is so badly needed right now and how you will pay it back. You should not assume obligations if you are not sure that you will be able to pay your creditors on time.
6. Read the contracts carefully
Carefully reading a boring and complicated contract, on which the fate of your own money depends, seems like an impossible task. And how not to trust a smiling manager who holds out a stack of papers for you to sign?
20 minutes to study the terms of the contract is not a long time, you will likely spend a lot more time and money trying to handle the unpleasant consequences.
Before putting your signature on the agreement, make sure that all the points it contains are clear to you, that the conditions are transparent, and that the wording is accurate. And don’t forget to pick up a second copy.
7. Start generating passive income
Imagine not having to work overtime in the new year to earn additional income. There are several ways to turn this pleasant thought into reality.
The simplest option is a bank deposit. But if you already have a financial security cushion for a rainy day, you can try investing some of the savings (but no more than 30%) in something more profitable.
Let’s say a mutual fund. This is a good place to start – you don’t need to become an investment expert; your money will be managed by professionals.
If you are ready to independently monitor the situation in the stock market, you can buy stocks or bonds.
8. Protect yourself from risks
Natural disasters, diseases, accidents, a meteorite fall – all these problems are difficult to predict. But insurance will help cover losses and mitigate the impact.
You can secure anything: soccer players secure your legs, singers secure your voice, and you can take care of the safety of your own health, apartment, and car.
9. Learn the tricks of scammers
On New Year’s Eve and holidays, scammers, who tricked to gain access to people’s savings, are even more active in targeting their victims. Criminals trust each other and lure sensitive data – complete card details, including three billing numbers, passwords, and bank notification codes. They need this information to steal money from your account.
Scammers use various psychological tricks to get you to tell them this information or enter it on a phishing site. And if you follow the scammers’ example and give them secret information or transfer money yourself, these losses will not be reimbursed to you.