5 Financial Resolutions To Build Your Wealth This New Year
by Mony Shah Finance 06 December 2023
The New Year is a time to reflect on your achievements and refresh your goals for the achievements. Most people make resolutions around health, self-care, and relationships. However, you should also prioritize your financial well-being as a part of goal-setting at this time of the year.
A recent survey highlights that almost half of Canadians accept being stressed about personal finances. Many of them believe their money stress has increased since before the pandemic. These statistics indicate the significance of focusing on stability, security, and growth.
Building wealth requires strategic planning, discipline, and a commitment to money-savvy habits. Consider starting this New Year on the right note by making these actionable financial resolutions to consolidate your wealth.
Create A Comprehensive Budget
Although budgeting may seem like a trivial thing, it is the first step toward building your wealth. With almost 50% of Canadians living paycheck to paycheck, budget planning becomes a necessity. Even those having extra money should do it to minimize wastage and spend wisely. A comprehensive budget enables you to track your income, expenses, and savings.
Start the New Year by analyzing your past expenses to identify areas to potentially cut back on. This way, you can allocate more toward saving and investment. Also, commit to reviewing and adjusting your budget as your financial situation evolves. If you can squeeze your budget a little, try building an emergency fund because it can eventually be the foundation of your wealth strategy.
Start A Side Hustle
A survey shows that 28% of Canadian adults have a side hustle for additional income. Most of them think they will need one in the future. Consider it a New Year’s resolution to start your wealth-building journey. It can help you stay afloat amid an inflationary environment and set yourself up for financial growth.
The good thing is that the country has a booming gig economy, specifically after the pandemic. You can utilize skills like writing, marketing, and software development to explore work opportunities online. Alternatively, look for weekend jobs or a small business from home that doesn’t require a full-time commitment.
Invest For The Long Haul
Wealth-building goes beyond saving; it also involves strategic investing. Mastering the investment game should be a part of your New Year’s resolutions this year. Assess your financial goals and risk tolerance, before you start exploring investment options. It is crucial to diversify your portfolio across different asset classes. Pick a mix of stocks, bonds, precious metals, and real estate to maximize growth and lower risks.
Tax-advantaged accounts such as registered retirement savings plans (RRSP) can help you bolster your investment growth in the long run. As an investor, you should know what to sell and when to do it. For example, it is best to sell overbought stocks sooner rather than later.
According to ValueTrend Wealth Management, it is easy to spot such stocks even without being an investment genius. You can check online resources for insights or seek professional guidance to learn more about these investments and eliminate them from your portfolio.
Reduce High-Interest Debt
Another financial resolution worth making this New Year is to minimize high-interest debt. With household debt in Canada sitting at 107% of the country’s GDP, debt management deserves more attention than ever. High-interest debt like credit card balances can affect your ability to accumulate wealth. Prioritize reducing and eventually eliminating such debts.
The best way to do it is by developing a debt repayment plan that targets the highest-interest debts first. At the same time, maintain minimum payments on others. You can accelerate the repayment process by consolidating debts. Try negotiating lower interest rates as the money saved from interest payments can help you achieve your savings and investment goals.
Gain Financial Literacy
Financial literacy is a significant aspect of wealth-building. However, surveys show that a substantial proportion of the Canadian population lacks a basic understanding of even simple financial concepts. You can hardly expect to build wealth without knowing the basics of financial management, saving plans, and investment strategies.
Commit to brushing up on your personal finance skills this New Year. You can enroll for a short online course, follow an expert for valuable insights, or seek in-person professional advice. Also, watch out for the latest market trends and changes in financial regulations and tax laws. These developments can affect your financial decisions in the long run.
Building wealth is an ongoing process requiring a good understanding of financial concepts like expenses, savings, and investments. It also requires smart hustling, debt management, and quick adaptation to evolving market trends. You can rely on this simple checklist to start your New Year with result-focused financial resolutions.
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