|Exceptional Ways to Improve Your Personal Finances in 2018|
The new year usually inspires new habits and new goals for most people. We want to improve relationships, health, improve the financial situation and many other goals.
If you want better financial conditions for the next year, follow these 15 tips to improve your personal finances.
How to improve your personal finances in this new year
Improving personal finances requires good planning and good decisions. It is based on the principle of savings, investment and protection.
1. Determine your net assets
You can not improve your financial situation if you have no idea about the situation itself. The starting point should therefore be the assessment of your current financial situation by stating your assets. Net worth is simply the sum of your valuable assets less all liabilities. Net results and analytics can help you set realistic financial goals for improvement.
2. Determine your financial goals
When you have planned your finances, review and revise your previous goals and action plan. If this is the first time, start with the basics of personal finance planning. Make clear what you want to achieve during the year. Do you want to buy a new home, expand your investment portfolio, or save money on a specific course?
Defining your financial goals makes it easy. Remember to group them into short- and long-term financial goals and manage them accordingly.
3. Set a personal budget and follow it.
You may be surprised that most people can not explain how they spend their monthly income. Why? Because they do not budget and do not monitor their personal finances. Learn how to prepare a family or personal budget with the Microsoft Excel paper-and-paper method, or use free online tools like Mint.com. Budgeting what can be spent can dramatically improve your personal financial situation over time.
4. Live within your finances and be yourself.
If you get 2018, you commit to invest your way by not following others. Your friends or neighbors can drive the latest cars or buy a new iPhone X phone, but that does not mean you should do the same thing. Think about it, they may have borrowed from the banks to buy these things. You must not allow peer pressure to influence your debt or spending decisions.
There are four types of people in the world of wealth creation, but the most unhappy are those who like to live beyond their means.
5. Save and invest at least 10% of your net income.
Save, save and save. Try to save 10% of your income on a savings account and then transfer the cumulative amount to an investment account every 3 or 6 months. For example, you can invest in treasury bills or time deposits with commercial banks. You can even start a small business if you dream of it.
People who save regularly are in the process of improving their financial situation.
6. Avoid Unnecessary buying and buy only what you need
Never buy a bigger product or service without finding more information about it. The purchase of important goods must be planned in all aspects. This allows you to rate different providers, organize funds and even understand the experiences of other users. If you buy something impulsively, let it be an item you need, not what you want.
7. Improve your financial education
Financial education is the starting point for managing and improving a person’s personal financial situation. If you understand and apply the concepts of budget, savings, investment, and compound interest, you’re more likely to accumulate wealth. Therefore, everyone should strive to learn the basics of personal finance.
8. Avoid non-value-added debt.
Do not offer funds or use funds to buy items such as clothing, vacations, phones, etc. They lose value over time. For this reason, these debts are called without added value or bad debt.
They have to pay debts to invest in products that gain value over time or provide returns. These investments include ownership, starting a business, investing in health or education.
With the growing lack of job security in the current market, everyone can be asked to go home or suffer a wage cut at any time. So, why not have an extra source of income as a class teacher on weekends, application developers, social networking consultants, and more? Better yet, you can start your own small business.
10. Invest in yourself and in others.
Investing in knowledge, skills, health, and relationships with family and friends are some of the most important ways to improve a situation in life. There is a very limited use of all wealth when there is no spirit, body or relationship in good health.
My most important personal development goal in 2018 is to work on my public speaking and leadership skills through the Toastmasters Club. It does not have to be expensive.
11. Create an emergency fund
As the name implies, this is the money you reserve in an emergency. The fund is designed to help you pay for expenses that would not normally be included in your personal budget, such as: Eg layoffs, health issues, major repairs and so on. Emergency funds are usually stored on liquid accounts such as savings accounts or money market accounts. Account that gives you instant access to your money when you need it.
12. Pay the expensive debt.
Do you have an outstanding debt? If your answer is yes, then it’s time to seriously consider sending it back. Do you also know that the interest rate of 25% for a loan of 100,000 D corresponds to the annual interest cost of 25,000 D?
Plan to pay your expensive loans with your accumulated savings, salary increases or annual performance bonuses. Your financial situation will improve if you pay expensive debts.
13. Discuss financial problems with your partner.
Coordinating expenses with your spouse can lead to a happy relationship while improving the family’s financial position. You can avoid unnecessary expenses and duplicates. If you are married or have a significant common spending goal, you can help reduce conflicts over daily or weekly expenses.
As part of our annual budget, my partner and I discuss vacation plans, tuition, rents, and so on. We review our finances on a quarterly basis, especially before reopening the schools.
14. Protect Your wealth
It is healthy to remember that the strongest can weaken and the wisest can go wrong. After you have created wealth, you must protect it. You can take out or buy insurance. Coverage means abandoning the “positive side” in exchange for protection from the “negative side”. The insurance is a defense measure to protect against possible adverse developments. Insurance example: property, car insurance, health insurance, etc.
15. Create a donation circle.
If you want to donate to a charity, but feel that your budget is too small to make a difference, there might be a circle of donations for you. Like a book club, this is a group of friends who band together to donate to a charity and often spend their time together.
The value of a person lies in what he gives and not in what he can receive. – Albert Einstein
With the price erosion of most commodities and the slow growth of many emerging markets, everyone should be prepared to improve their personal financial situation, and I hope these tips were helpful.