5 financial new year's resolutions for 2021
Debt management is always important, no matter what time of year it is. However, the New Year is the perfect time to review your finances and set attainable goals for 2021.
“Many people find themselves strapped for cash in the beginning of the year after the busy (and costly) festive season and as a result, people start the year on the back foot financially. It doesn’t have to be this way. If you make small changes, remain disciplined and plan ahead you can improve your financial position and learn to better manage your money in the long-term,” says Cyber Finance founder and CEO, Hans Overbeek.
Cyber Finance offers you five suggestions to start your year off on the right foot and take steps to correct the overspending from the festive season.
Set clear financial goals
The first step to starting your financial year is establishing where you want to go in 2021. These goals will be specific to your individual financial needs and wants, but some could include setting up a retirement fund or saving for a down payment on a house. Set goals to pay off your high-interest credit cards within a fixed time period or start a rainy-day savings fund. Whatever your goals are, make sure to write them down and consult the list every month to make sure you are sticking to it.
Make a list of all your liabilities and organize them according to the highest annual interest rate. Make a plan to pay off debt with the highest interest rate first so that interest doesn’t accumulate, and you can start to really invest and save money strategically.
Build an emergency fund
2020 definitely taught many of us a hard lesson — make sure you have emergency savings to fall back on when natural disasters hit us unexpectedly. Without an emergency fund, people will almost always look to credit providers to get them out of hot water, but this will lead to the accumulation of bad debt as they are borrowing money without having the means to pay it back. Discipline yourself to putting away some money each month, so that when disaster, in its many forms, strikes again, you’ll be in a better position to cope.
Monitor your credit report
Make a habit of reviewing your credit report at least three times a year. You can download your credit report for free, three times a year, from the major credit bureaus (Experian, Transunion and Equifax). Monitoring your credit report will allow you to keep on top of your credit rating and make the necessary adjustments to your debt repayment plan.
Try and keep up to date on the latest economic news and the country’s financial situation. Set yourself the goal of reading 5 current financial books this year and keeping up to date on monthly financial columns. Informing yourself is the most powerful way to stay in control of your finances. Knowing what is affecting the economic climate and in turn, your financial situation, will help you make the right decisions when setting, and executing, your goals in 2021.