Why should you set financial New Year’s resolutions?

Posted on January 8, 2018 by ATB Chartered Accountants

At this time of year, people often have time to focus on their finances; but the New Year is a great time of the year to actually look at your wealth. And make New Year’s resolutions for your financial future.

People make New Year’s resolutions every year. ‘I’m going to lose weight’, ‘I’m going to start going to the gym more’, and ‘I’m going to learn a new language’ are likely resolutions you’ve made yourself at some point. But, how often do you set these goals around your financial future? Probably not often.

So, why should you set financial New Year’s resolutions?

1. To identify your financial goals.

In order to achieve your desired financial future, you first need to set goals and develop a plan. These goals might be taking your family on a holiday, paying off your debts, or purchasing an investment property. Regardless of what your goal is, you need to consider your current financial position, and what changes need to be made to achieve these goals. And – in order to achieve these goals you need to have a plan in place.

2. To plan for your future.

If you want to have great choices in your retirement, you need to start planning for your future today.

In Paul’s words, ‘Most of us, at this time of year see older relatives, some of whom have retired really really well and enjoy life the the full. Then there are others who have not retired so well. Maybe they’re on the pension, and they can’t do what they want to do – they can’t do the travel, they can’t buy that car, and they can’t have the lifestyle choices that they want.’

When you have a financial goal in place and a plan to achieve it, you are investing in your future. A good place to start is looking at your superannuation fund. For many Australian couples, $100,000 is needed per year in retirement to maintain their current lifestyles. So, what can be done this year to bring you closer to that figure? Through assessing your financial situation, you might set up a plan to purchase an investment property in the next 6-months. Any financial goal you make will build your wealth and help you plan for your future.

3. To pay off your debts.

If your financial resolution for this year is to pay off your debts, a realistic consideration of your financial situation is needed. How much are you earning per month? How much are you spending? Where can expenses be reduced? The first step in debt reduction is understanding where money can be reapplied to debt repayments.

Second, which debts should be prioritised? Any credit card debts or bank loans you may have should be paid off first. These debts might also be your smallest and more manageable – and are likely to hold the highest interest rates. Through tackling these debts in 2018, you’ll be better equipped to continue minimising your overall debts.

New Year’s Accounting Resolutions

Setting financial New Year’s resolutions will help you build wealth and secure your financial future. Through developing a plan and committing to your goals, you can make 2018 a prosperous year!

If you’re ready to think more strategically about your future, talk to us about your financial goals, we’re happy to help.