A new year usually means a new opportunity to work on your dreams and goals. Whether you want to buy a house, a car or start a business, money is that one factor you need to get started. This is why more than any other type of New Year's resolutions, the ones that are related to your finances are what matter most.
If you're ready to get this year right and make it better than last year at least financially, here's how you can build wealth this 2015.
When it comes to your spending, there are two key things you need to do.
Make a budget and stick with it
This has been rehashed time and time again but you need to do it anyway. In order to get your finances right, you need to start somewhere and a good place to focus on is your budget. Buy a notebook, record your pay and expenses so you know exactly where your money is going.
From your take home pay, you need to subtract all your expenses. That includes groceries, utilities, mortgage and transportation among other things that should not exceed a total of 50% of your pay check. After which, allot 20% of your pay for savings, retirement funds and debt. The goal is to stick within these percentages as much as you can for the next 12 months.
Investigate your expenses
While you're making your budget, it also pays to look at all your monthly and recurring memberships closely. Maybe you no longer need your gym membership. Maybe you can downgrade your cable, Internet and phone subscriptions. Investigate each expense according to your needs then adjust accordingly to maximize the value you are getting. The extra money you get by adjusting your expenses you can add to your savings account.
When it comes to your debt, her are things you can do to help with your building wealth project for 2015:
Get financial help and make a plan
Majority of people are carrying debts. Whether it's a hefty credit card balance or a school loan, the key is not to get drowned by the high interest rates but to do what you can to avoid getting in the red zone. This is where making a budget comes handy. So long as you can stick with it and allot sufficient amount for debt repayments, you should be good for 2015.
To kick things off right, make a list of all your debts and arranged them according to interest rate. The goal is to pay as much as you can for debts with the highest interest rates and minimum for the lowest interest rates.
Add to your income
If you want to pay off all your debts faster, you may want to find ways to increase your income. You can request for a raise for example or you can find for part time jobs that will comfortably fit within your current schedule. Maybe you can do some freelance work or you can babysit animals and babies. Either way, make sure you put the extra money to your debt repayment project.
When it comes to your retirement, here's what you need to do:
Max out contributions
Most employers usually offer their employees with a matching retirement contribution. It is automatically deducted from your take home pay. What you can do is make sure that you are signed up for the maximum deduction. If you still have extra money to spare, you may also want to sign up for another retirement fund.
Consider other investments
When it comes to building wealth this 2015, you need to not only settle with a typical retirement fund. You need to be more aggressive by considering other investment mediums such as bonds, mutual funds and stocks if you haven’t ventured in this area yet. Just make sure that you know what you’re getting into before you put your money in a major investment fund.
If possible, you may want to get professional help to take care of your finances for you this year. Remember that unless your finances are in a good place, it will be hard to achieve any worthwhile goals for the year.