Each turn of the year, the most common expectation is spoken: “I hope this year is better than last year.” Everyone certainly hope so, especially the situation is better for your savings.
Not infrequently, a resolution to improve the contents of your wallet spending patterns always repeating, at every turn of the year.
Tracy Hougum a financial planner suggested that, before the same resolution as last year came out again this year, you should identify problems and potential in you for first.
With this understanding, you will be easier to decide what to do in the near future to pave your resolution, particularly in the financial strategy.
“Move yourself to make and ensure goals are specific and actionable,” said financial planner Exencial Wealth Advisors, Neil Krishnaswamy in CNN.com. “And specify a deadline!”
Financial Planner of Financia Consulting Eko Endarto said, before setting a financial resolution, it is worth evaluating your financial situation that is currently running. What should be repaired, and if necessary changed.
How to manage cash flow, an increase in assets, as well as investment.
But maybe there could be additional like wanting to go abroad for example, or the education of children has changed. Things like that can make people change the resolution.
Any financial resolution would have an impact on your balance sheet. There are items of income that must be added, as well as expenditure items are increasingly tightened. Therefore, preferably early in establishing a resolution would be better.
Some financial planners also outlines a five-step fix your financial strategy starts from the most crucial thing: pay the debts.
1. Pay off debt quickly
One of the effects of the Fed’s interest rate hikes in mid-December yesterday is, many banks are expected to raise interest rates on loans.
“Loans will be more expensive as interest rate hikes,” said Christopher Krell, a financial planner.
Well, if you already have some debt, it is recommended to prioritize the order of highest interest rate increase in the calculation of your finances.
2. Create an emergency fund
Savings judged insufficient to warrant your life in 2016. Emergency fund is needed at any time if you can not work or lose their jobs.
Experts recommend, the amount of this emergency fund reaches 3 to 6 months of life needs. “This is the range and depending on your personal situation,” said financial planner and vice president of T. Rowe Price Investment Services, Stuart Ritter.
According to him, the need for an emergency fund will be higher when you are single and have only one income is from salary.
3. Increase the pension fund
Experts recommend setting aside 10 percent of income to retirement accounts. If you do not so much excess of your income, then it can be started from the set aside 1 percent, 2 percent, and so on gradually.
4. Reset the investment strategy
It is also a good idea to start the new year with plans to invest, but also considering the risks next year. The need for diversification of investment products to benefit according to your purpose.
5. Review insurance
So have additional dependents, taking into account the needs and benefits of insurance. “Make sure you have twice your salary,” said Krell. In addition, the need for a review of the benefits after the change of your dependents.