Discover the key to reaching all of your financial resolutions in the new year!
We’re halfway through the first quarter of 2024 already! It’s interesting how much time has passed since we watched the clocks turn 12 and ushered in a new year. But what about all of those financial resolutions we made? Are you on track to seeing them accomplished, or have you fallen by the wayside?
It can get tricky trying to meet the goals you’ve set for yourself, especially with all the financial stress predicted for this year– you’re not alone. But we’re not quitting our resolutions; not now, not ever. Throwing in the towel isn’t an option, so let’s help you beat the feeling of being overwhelmed by financial goals and rising costs.Â
This edition of the SimplVest Newsletter offers a proven strategy for achieving your New Year’s resolutions and staying on track throughout the year. Let’s see what it’s all about!
Make Your Goals Automatic for Guaranteed Success
When it comes down to tackling your financial goals and ensuring they don’t fall by the wayside, the key is making them automatic. While it’s common for people to prioritize bills and save money with whatever is left, common rarely gets you the desired results. So, why not try out a different approach?: PAY YOURSELF FIRST.
Finding extra money to set aside or pay off debts may have been a walk in the park in the past, but today, doing so can be challenging. A survey conducted by Allianz Life Insurance revealed that 73% of respondents feel their income hasn’t adjusted with the rise in inflation. And that’s just the United States alone. All around the world, it’s becoming more challenging to make ends meet on the same cash inflow that was just enough a short while ago.
How, then, do we beat the challenge? Enter automation!
Instead of waiting and hoping you’ll have enough left over at the end of the month, set up automatic transfers to your debt payments and savings. This way, you don’t even have to think about it, and your money gets where it needs to go before you can spend it elsewhere. ✨
Here’s how it works:
1. Make Credit Card Payments a Priority
If you’re saddled with outstanding credit card debt (or any type of debt), paying it down should be your first priority. Neglecting those balances can be costly, especially with rising interest rates. According to LendingTree, some borrowers now face interest rates of 20% or higher.
Remember to pay on time, every time. Missing a credit card payment can seriously damage your credit rating. Set up auto-pay through your bank’s or credit card issuer’s website to ensure you never miss a payment. However, keep an eye on your accounts, as technology is imperfect. Additionally, you should consider paying more than the minimum amount— it helps settle those balances faster.
2. Build an Emergency Savings Fund
Having some cash set aside is wise to avoid relying on credit cards or loan companies during unexpected emergencies. Experts recommend having at least three to six months of living expenses in an emergency fund. With interest rates rising, you can earn more on your savings by exploring online savings accounts offering rates as high as 5% or more.
Make saving a habit by arranging automatic deductions from your paycheck into your bank account. This way, you consistently contribute funds towards your emergency fund without having to remember each time.
3. Make Retirement Investing A Priority
Sure, we get it. It’s not easy to think about the future when your present isn’t looking so good. While it may be tempting to postpone retirement investing due to higher living costs and other financial obligations, don’t put it on the back burner. Time is your most powerful asset when it comes to retirement, so the longer your money is invested, the more it can compound and grow.
If you work in the United States and have a retirement plan like a 401(k), experts suggest investing at least up to the company match. Take advantage of your employer’s free money by contributing the same percentage they match, typically 5%.
How much should you actually put aside?
Saving 10% of your total income is a good rule of thumb, but start with what works for you. When you automate these contributions, it’s easier to live off the remaining 90% and ensure you don’t miss the opportunity to save and invest for your future.
Another point to note for your savings is to allocate them strategically based on your needs. You could consider splitting the 10% saved between emergencies and retirement funds. If you’re unsure what should fall under each category, take time to assess where your savings are required the most and make informed decisions accordingly. The most important questions you must ask yourself are, “What do I need?” “Where should my savings go?” or “What’s the best use of these resources?”
Make A Commitment To Yourself
It’s only the second month of the year, and it’s not over until the fat lady sings! You can still meet your goals, but it must come with a serious dose of discipline. Your financial journey in 2024 won’t see the desired success unless you make a commitment to yourself. Start paying yourself first, automate your finances, and watch your resolutions become a reality!
Continue the year with this powerful strategy, and let’s make 2024 your best financial year yet!
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