Many of us begin the year making resolutions and quite often these resolutions can be related to finances. Sometimes these resolutions are about exercising more, eating healthier, losing weight or fixing our finances. That said, when it comes to making decisions about your finances, any time of the year is suitable and the basics remain the same. So, with this in mind here are our top 11 ways of getting ahead financially.
- Get paid your Worth
As easy as it sounds, many of us find this simple rule difficult. Be sure to research what your job is worth in the marketplace. The way to do this is by evaluating your going rate, your skills, your tasks, your productivity and what you contribute to your company. Being underpaid can have a financial impact over the years.
- Look into your Insurance Coverages
We are easily talked into purchasing and paying over the odds for disability and life insurance. For example, situations such as buying life insurance when you do not have any dependents, buying insurance policies for whole life when in fact real life are more appropriate and adding additional insurance policies from car finance in Hamilton, business asset finance or working with finance companies in New Zealand in general. That said it is important to make sure that any policies you do have are suitable and cover you and your dependents in the event of a disability or death.
Each year make sure that you also look into your other insurance policies, i.e. home, travel and Hamilton car insurance to make sure that you are still receiving the best deal on the market.
- Spend less than you Earn
Regardless of the amount that you are paid, you will never get ahead of the game if you spend more than you earn. It is easier to spend more than you earn but by making some small sacrifices you will soon see that you can start to put money away and create some savings.
- Your Record Keeping needs to be Organised
If your records or are not in order then you are probably missing out on income tax deductions and credits that you could be claiming and accountants in Epsom are your best bet if you need clarification on this. Create an easy system that works well for you so that you are not hunting for information when you need it.
- Clear Credit Cards
Debts related to credit cards are the main obstacle when it comes to getting ahead financially. These small pieces of plastic are so easy to use and it is easy to forget that we are actually spending real money when we use them for making purchases, both small or large. Although we have good intentions of paying off the balance asap, we often do not and end up purchasing more than we would have than if we would have used actual cash.
- Create a Budget
Ask yourself, if you do not have a budget then how do you know where your money is being spent? You need to try and set saving and spending goals so you can keep a track on where your money is going. Regardless of how much money you earn, you do need to create a budget for yourself.
- Contribute to a Retirement Plan
Make sure that you are contributing to your employer’s retirement plan if you are not already doing so. If you are already contributing then it is worth considering increasing your contributions. The long term effects of even a small increase are totally worth it.
If you have a retirement plan in place and also have a savings account then the next step would be to consider investing your money. The way that you choose to invest your money depends on how fast you would need the access to the money. One option is stocks which are considered to be a long-term investment and only worth looking into if you are happy to invest for five years or more. If you find that you need the money sooner than this then you can reduce your return by choosing to cash in when the value of the stock is down.
- Start a Savings Plan
We have all heard the saying, pay yourself first. If you pay all other financial obligations before you look at what is left that you could save, its highly likely that you will never manage to create a worthwhile savings account/investment. So, before you pay any bills, it is worth putting aside between 5 and 10% of your salary towards savings. A better idea would be to have the money automatically deducted from your salary which goes straight into your savings account.
- Take Advantage of Your Employment Benefits
The benefits that some employers provide are worth a great deal. Look into benefits such as dental insurance, medical insurance and flexible spending accounts. Be sure to take advantage of your benefits, especially those that can help you to save money by lowering your expenses and reducing taxes.
- Update your Will
The majority of us do not have wills. Irrespective of how much you own, you need to have a will in place if you have dependents. Wills can be easy to create if your situation is fairly clear. For the sake of your loved ones, write a will which will protect them. Trust accountants in Auckland or wherever is local to you, is often the best place to start for help with this.
So, when it comes to the end of the year, take a look at how many of these suggestions you have adopted. If it is less than six then you probably need to try a bit harder. The best approach would be to choose one of these suggestions at a time and set a goal which results in all 11 of these eventually being a part of your lifestyle.