10 New Year's Easy Financial Resolutions

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It’s New Year and it’s time for resolutions. But before you get tough on yourself, check these simple financial resolutions that anyone can do.

 

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1.  Start Creating Your Emergency Fund

Everyone must start saving for emergency fund before anything else.  It is as important as your life and your family members. Three months worth of your expenses should be kept as your liquid cash. So if your monthly expense reached to 20,000 pesos, you must have at least 60,000 pesos cash in your savings account. 

Once you reached your target (ex. Php 60,000), you can add another 2-3 months at the same time of investing or funding another goal like money for travelling.  Having emergency fund gives you time to recover financially when unexpected expense comes along e.g. unemployment, hospitalization.

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2.  Reduce Your Credit Cards

Credit card companies will entice you with their promotions in applying one.  However, having credit cards more than what you need may bring you to deep burden later on. Getting 1 -2 for big and online purchases for your family and personal needs must be enough. 

If you are in the process of applying for one, do not forget to look for the low interest rate and that offers good perks e.g point system, miles, discounts on establishments. Our family get to watch movie for FREE every month, sometimes even twice a month. There are times we get free dinner too.

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3.  Add a Little More To Your Minimum Required Payment.

Once you have credit card, as much as possible pay the total amount charge reflected on your bill.  If you cannot do this, do not just settle to pay just the minimum charge. Add as much as 20%-30% payment on top of your minimum charge to avoid high interest. Pay your balance as soon as you can because credit card companies compute your bills with compounding interest which means that the interest get its own interest different from the principal amount. Paying the minimum amount is like san infestation that you cannot escape from if you do not get to the root of it.

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4.  Apply Loans For Necessary Needs Only

Debts are not bad at all, that is only if you know how to manage it.  Applying for loan for your personal needs may lead up to financial suicide. However, for investments that will give you an extra stream of income, taking loans may be the best and wise option.

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5.  Do Not Let The Bills Stack Up

Living a life (a good life that is) is also living tons of monthly, quarterly and annual bills.  If you are using electricity, taking a daily bath, driving a car to work, most likely you cannot avoid bills.  Every time a bill arrives at your door, do not slip it in the drawer.  Leave if where you can easily see it for you to remember it, like the fridge or the aquarium (if you have one).  Pay as soon as you can so you will avoid to get the services cut.

When you apply for an account it is worthy to consider the start date and the cut off for the due payment.  It is always wise to spread out in different times of the month so as not to overwhelm you with the task and the amount you have to shell out.

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6.  Let go of the “Mura Lang Naman” Mentality

You found a nice shirt or pretty sandals at the SALE in the mall but you really have no plan to get one. Do not grab it and tell yourself “mura lang naman eh”.  Before you know it, you have tons of things you do not necessarily need. Small amount make up for the big amounts. Small impulsive buying can lead you to big trouble overtime.

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7.   Dare to Compare

Are you considering changing your phone or changing your car maybe?  Before running to the shop, do your homework first and compare the prices and requirements.  Some shops would offer freebies that you may not notice, so don’t hasten to bring out that wallet.

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8.  Keep Your Coins

Stash away your extra coins in your purse. It will lighten up the weight on your shoulder but most of all, you will be able to save without feeling you are saving.

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9.Stay At Home

Staying at home 2 weekends every month will definitely keep you away from spending. Playing board games, watching movies at home and gardening will cost you nothing and yet therapeutic than burning your cash in the mall.  Mind you, 2 weekends will not hurt you at all.

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10.         Stick Like a Bee

But the most important resolution of all is stick to all your resolutions to reap the benefits of making one. Intentions are good  but the actions are the best.

Good luck and let’s make this year a wealthy one!

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