“I always did something I was a little not ready to do. I think that’s how you grow. When there’s that moment of ‘Wow, I’m not really sure I can do this,’ and you push through those moments, that’s when you have a breakthrough.”
Marissa Mayer, CEO of Yahoo!
It’s that wonderful, yet somewhat dreaded, time of the year - we step on the scales, gasp in horror and begin to manically scribble down workout related resolutions, sifting through inspirational Pinterest boards whilst cursing the calories ingested over Christmas under our breaths. Sounds familiar? We are totally on board with your health and fitness goals, as long as you don’t neglect your financial ones while you're at it!
Starting the year with an ambitious, yet realistic list of financial resolutions is an invaluable way to keep yourself in check; despite the fact that research shows that 85% of resolutions go caput within six months, people who commit themselves to a resolution are 10 times more likely to reach their goals than those who ignore the popular custom.
The more specific and detail-oriented your goals are, the higher the chances you’ll reach them. We suggest you trade in the vague “I will be saving more money in 2017” for the much more concrete “I will be saving 10% of my monthly salary every month in 2017 on an ISA or a pension”. A financial resolution that is more personal and meaningful is far more likely to yield a welcome result.
OFF TO YOU
5 financial must-do’s for 2017
Grow your income: Leverage your skills and your knowledge, which we know you’ve got plenty of, to boost your cash flow. Be confident - don’t be afraid to ask for a promotion or a raise. Consider other passive streams of income for a little extra cash. Once you get the momentum going, your earnings should peak in your 40s and 50s.
Eliminate your debt: As a general rule of thumb, you need to be comfortable with the amount of debt you have excluding your mortgage. Don’t bury your head in the sand - it’s best to face your debts before they spiral, paying off the ones with the highest interest rates first as you shift your spending to debit cards and cash.
Plan your budget: It may not sound particularly exciting, but writing out a plan will help ensure you’re spending less than you earn. Once you have an idea of your spending vs. your income, you can set aside a set amount of money each month to put into a savings account - contact your bank to set-up automatic monthly transfers. You can also take control of your spending with some handy apps - a great initial goal is to set aside 6 months’ worth of take-home pay. This may sound difficult, but with the right planning and budgeting, we promise you it’s totally doable.
Prepare for retirement: We’ve talked about the importance of planning for your retirement in our previous newsletters - we hope you were paying attention! It’s crucial you understand what you have in place - max out your allocation for the coming year. If you have no idea where you stand, now is a good time to consolidate all your accounts in the same place and check your asset allocation. We recommend you try out this retirement calculator to help get you started.
Get acquainted with investing: It may be daunting for first-timers but we don’t want to hear any more excuses this year - it’s time to get comfortable with the idea of investing. It doesn’t have to be difficult, and you needn’t be a financial pro - just follow these three simple principles to start with and try to stay informed by reading a handful of your favourite financial blogs as well as our newsletter.
THE BIGGER PICTURE
Let’s talk about mo-... hold on, where are you going? It’s an old truism that talking about money makes us uncomfortable. We’re afraid of being judged for earning “too much” or “too little”, for being in debt, not having enough savings or borrowing money from our parents. The topic feels awkward, emotionally charged and complex. It’s almost like talking about the intimate details of one’s relationship. This is why we think it’s important to change our attitude and break the taboo. We launched Vestpod to give you the most valuable resources for a wealthier, happier, and financially independent life. And we’re here to accompany you through this journey, because no one should face the overwhelming task of financial management on their own.
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We are not certified financial advisers! The articles and information made available on Vestpod are provided for information and educational purposes only and do not constitute financial advice. You are advised to consult with an independent financial advisor for advice on your specific circumstances. Read our Disclaimer here.