By Although you don’t have to wait until the start of the new year to change your financial practices, the calendar’s clean slate may present a good chance to do so. But all too frequently, when we recognise that something in our lives is not quite going as planned, we are tempted to dismantle everything and begin anew with a comprehensive and overwhelming remedy.
However, often all it takes to turn things around is a few minor adjustments to current routines or the introduction of new ones, which enables one wise financial choice to spill over into the next. Sounds easier to handle, doesn’t it? Continue reading for some inspiration.
1. Increase your retirement contributions.
It is rather simple to increase the amount you are allocating to retirement savings, and over time, it can have a significant effect. For example, according to Investopedia, which cited research by J.P. Morgan, “a worker who raises contributions by just 1% in their mid-20s – starting at a 5% rate and bumping up to 8% over three years – could accumulate about $84,000 more by retirement than someone who never increases their rate.”
Diversifying more of your money may initially seem like a stretch for your budget, but according to Yahoo Finance, “often, you can increase your retirement contributions without making a meaningful difference to your current lifestyle,” especially if the increments are smaller, like a 1% increase.
2. Begin monitoring your expenditures
This is another minor change that can have a significant impact on your financial life, both in terms of how much you spend and how you perceive where your money is going. You may discover that “some impulse purchases that you shrug off regularly might be having a bigger impact on your bottom line than you think” once you start keeping a closer eye on your spending, according to Citizens Bank. This can also provide you a chance to assess whether your expenditures are truly in line with your overarching objectives (more on that later).
You may create a basic spreadsheet to update regularly, or you can use a number of apps to make this tracking really easy.
3. Establish objectives and make a conscious effort to achieve them
It might be challenging to stay motivated when it comes to investing, budgeting, or saving if you don’t know why. Establishing your long-term and short-term financial objectives can give you much-needed clarity and guarantee that you begin taking the steps required to truly reach those objectives.
You have complete control over how these objectives are shaped. For example, “one person’s goals might be to pay off their student loans and save for a down payment on a house,” while “another might want to sock away enough cash in an online bank account to start their own business down the road,” according to SoFi. Making your money work for you rather than the other way around is truly the key.
