Financial New Years Resolutions

Written by moneysupermarket.com

It’s that time of year when everybody starts thinking about 2011 and I’m sure we’re all hoping for a fantastic year, but nobody knows what surprises lay just around the corner, only time will tell. The beginning of a new year means a new fresh start, and with this new start many people like to set new years resolutions. If there’s any of you that don’t know, a new years resolution is a sort of commitment, where you can set yourself a set of goals that you would like to achieve in the new year.

I read a recent article that said around 50% of people are confident that they will achieve their new years resolutions when they set them, however only 12% actually achieve what they set out to do. Bearing these figures in mind, I thought I would set myself a challenge to actually commit to my objectives this year so that I can join the 12%.Combining new years resolutions with my interest in finance I thought I would detail some key areas where I will be focussing my goals in 2011.

My budget

A budget is one of the most important financial tools when looking after your finances. If you have an effective budget that does what it’s supposed to, then that’s the first step to controlling your finances and not letting your finances control you.  The basic principle of budgeting is to identify where your money is being spent, and to do this effectively you have to be thorough to identify all your expenditure. For a budget to be successful, set yourself some small and simple steps until you understand the basic principle, then you can build your budget so that it’s a more robust financial tool.

My debt

A friend of mine said to me that getting into debt is so much easier than getting out of it and boy was he right! When your goals are financially motivated and you have debts that are costing you money, tackling these debts should be your immediate focus. If your level of debt is quite low then look at setting up a debt repayment plan for the new year and make sure you tackle any high interest debts first as they will be the most damaging. Paying back whatever debts you may have will also improve your personal credit score which is an added bonus.

My savings

Before you think about saving money, you should ensure that your debts are paid off first. Once your finances are at a level you are happy with, then you can look at starting to save. Make sure that when you want to save you have the best savings account to do so. If you live in the US then the Lifetime Savings Account offers great rewards on your spending, and the equivalent for people in the UK is a cash-ISA account, before you commit you should do your research and find out what the best option is for you.

Throughout the year, it’s important to ensure that you remain positive when trying to achieve your goals. I will do this by evaluating my progress from time to time, and by braking up my goals into more short term and long term aims. It’s a great way to remain focused.