With the New Year approaching, many people worldwide, including African Americans, are making resolutions to get their finances in order. However, thinking about how to fix your money problems can be difficult, so we’ve outlined five powerful financial New Year’s resolutions.
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I’ll Not Make Impulse Purchases
If you just see an item you like and buy it immediately, you act on things fast. Before using your cash, credit card, or debit card to make a purchase, it’s important to take a moment and review how buying the item will impact your budget and financial goals.
You don’t have to fall victim to the sales promotion of ‘this offer won’t last long, act fast or you miss it.’ The truth is that this high-pressure marketing tactic is designed to push the logical side of your brain away so you act emotionally.
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I’ll Budget My Finances
It’s understandable that during Christmas, many people dump their budgets in favor of sales, gifting, traveling, and hosting. It’s okay to go above your budget once in a while.
But what financial experts don’t encourage isn’t budgeting your finances at all. Without a budget, you’ll always run the risk of spending all your income once you receive it. Having a budget allows you to track your spending and hold yourself accountable.
Spending everything as it comes in will make you live from hand to mouth, meaning if you don’t work, you won’t eat. Plus, you’ll never be able to build wealth. Get a budgeting template from Amazon if you’re unsure about how to plan your finances.
I’ll Use Available Tax Advantage Options
Many people want to cut down on the amount of tax that they pay. However, the problem is that they still pick investment opportunities that attract yearly capital gains and income taxes.
You can benefit from compounding interest with tax advantages if you have a long time to reach your money goals. The most common example is a retirement account.
Suppose one of your financial goals is retirement, and you choose not to participate in your company’s sponsored retirement plan because your employer didn’t provide a match. In that case, you’re some compounding interest and tax savings.
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I’ll Define My Money Goals and Invest Accordingly
All other financial New Year’s resolutions won’t work if you fail to clearly define your money goals. You need to think about the things you want to achieve in your life financially in the coming year and beyond. It’s important to get very specific and outline your goals in order of importance. The good thing is that you can get a setting workbook from Amazon that can guide you.
Your year financial goals can be any of the following:
- Clear my $16,000 in credit card debt by March
- Launch my black-owned business by June
- Buy a car by October.
I’ll Diversify
One of the most proven methods of reducing investment risks is diversification. The good news is that it’s very easy and cheap to achieve these days.
Diversification means investing in different financial assets rather than putting all your money in one. So, it’s important that you diversify your investment portfolio.
At the beginning of each year, we make New Year’s resolutions to get our finances in order. But most people forget about their resolution as time progresses. Following the five financial New Year’s resolutions covered here can help you manage your finances. Check Amazon for guides on how to achieve your New Year’s Resolutions.
People Also Read: 40 Inspiring New Year Quotes to Help Kickstart Your Plans
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