Too often, when the much awaited New Year finally comes, people come up with resolutions to better their lives in one way or another. One resolution that almost always finds its way in most people’s lists of resolutions is that of growing financially.
Most people promise themselves to do everything to improve their financial statuses.
Just as easy as the resolution finds its way into the lists, it fades into oblivion very few days after the start of the year.
Most people are often fast to come up with resolutions for the new year but are never keen to have measures in place to ensure those resolutions are achieved. Without these measures, it is very easy to fail in achieving any resolution we set.
Here are some ways to ensure that resolution of growing financially is achieved;
- Track Expenditure
Very few people actually have knowledge of where their hard earned money goes to. The key to building a strong financial plan for the future is to understand how much you spend and save right now. This is called tracking your cash flow, and it can give you a sense of control and confidence that makes it easier to make financial changes in your life.
The point of the exercise is to find out whether you end each month with a cash surplus or a cash deficit. This number will tell you a lot about your general financial shape. A surplus means you’re living within your means, while a deficit shows you’re spending more than you make. If you have a deficit, you will have to cut your expenses (or increase your income) to achieve any financial goals.
- Make a budget
At the beginning of each month, you should draft a budget, clearly stating how much you intend to spend. With this done, you should bank the rest (preferably in a fixed deposit account).
You have to remain disciplined in ensuring you bank the amount you stipulate you should save each month.
With a budget in place, one can then be able to plan for purchases, whether long term or short term.
- Avoid Unnecessary debts
So often, people rush to acquire loans to satisfy some financial requirements that may be deemed unnecessary. For instance, if your television set develops technical problems, you do not have to acquire a loan to buy a new set. If you have to purchase one, slot it into your budget and free up money for it.
If you are currently in debt, plan your budget so that you can get out of debt more quickly by making extra payments. If you are not in debt, continue to live that way by putting off your purchases until you have saved enough to cover them.
- Develop a strategy
To be able to achieve any goals, you must have a strategy in place. You must have a clear work-plan of how you intend to achieve those goals.
The usual route is to spend less than you earn and invest the surplus in such a way that you can get where you want to go.
- Reduce your spending
Cutting spending by even a small amount on a regular basis will make a big difference in the long run. Live frugally by learning to recognize the difference between want and need.
- Invest your money
Your money will grow much faster if you invest it rather than leaving it in a savings account. The increase in value will enable you to reach your goal of financial independence much more quickly.
