Here are ways to save, invest and get smart with money this year, according to experts.

Think of this year as your year of financial breakthrough. Amen! Of course, you have a New Year resolution, but did you plan a financial resolution too? You included it in this year’s resolution, right? But it has to be separate.

Truth is, making money — lots of money — isn’t the same thing as being smart with money. It doesn’t matter how fat your paycheck is, it seems not enough. Learn to game up your financial tactics. In this article, we’ll discuss a few financial tips to help you plan your financial resolution this year. However, not every item in this list will apply to you, but sort through it for the ones that might be of interest. Dear friends, here are ways to make the most of your money this year.

#1. Make A Forecast

As you’re starting the new year, find time to envision your financial goals for the year. Reflect on last year and think about anything you’d want to do differently this year. What went wrong last year that you’d want to avoid this year? What went well that you’d want to improve? What would you like to change? Will you be able to achieve your goals? Find ample time to ponder over what you want out of this year.

#2. Plan A Budget, Urgently

This should have been #1 on this list. Of course! Planning a budget helps you know what to do with your money before you get hold of it. This ensures that you don’t overspend your money by making an expenditure of how you’d like to spend your money. There are several budgeting apps and strategies out there — like Personal Capital or You Need A Budget, or create your own Excel tracking sheet. But for newbies, we recommend you try the 50/20/30 rule.

#3. Increase Your Savings Rate

This is the percentage of your income that you keep each month, versus the amount that you spend. (Calculate it here). Increasing it, even slightly, will put you in a better overall financial position. This ensures that you have additional money stashed away for other goals. Financial advisors recommend increasing your 401(k) contributions at the beginning of the year, or cutting down unwanted subscription fees to save a little extra.

#4. Know Your Net Worth

What’s your net worth? You have no idea. This is essentially calculating your assets (commodities that make money) like cash in checking and savings accounts, investments, real estate, against your liabilities (commodities that lose money) like student loans, mortgages, and overdue credit card bills. Knowing your net worth puts you in good position to knowing how much cash flow your have versus how you plan on making or spending money.

#5. Start Investing

This is your safest bet to growing your net worth. Set aside some money from your budget towards your investment account. There are several options available from the stock market to buying treasuries. Financial experts recommend starting with an index fund. These are designed to track the entire stock market, instead of investing in only certain companies. This gives you a well-diversified portfolio that can help hedge against market downturns.

#6. Avoid Most Trading Apps

Speaking of investing, then be careful of not what you’re investing in, but where that is. There are several apps and so-called brokers out there who will make a game out of you — especially short-term investments and trades. Avoid trading platforms like binary options, as these are highly risky and not recommended for amateur investors and newbies. However, if you opt for these “get-rich-quick” schemes, anyway, make sure that you have a sizable emergency fund.

#7. Cut Down Your Expenses

This is another way to save a little extra money, and ensure you’re spending your money on important things by ranking your expenses. Make a “to-spend-list” on all your essential (and non-) expenses for each month — and the past three months. Rank these items and try to cut down on all unnecessary or least important expenditure. Even include this in your budget as you draw your budget expenditure; and consider putting the extra cash towards one of your goals instead.

#8. Seek Financial Therapy

Oh yes, that’s a thing. How is your relationship with money? Not so much! If you often spend too much — like recklessly — of your money, then you need to consider an appointment with a financial therapist. These are professionals who combine financial advice with behavioral psychology, seeking to help people deal with their underlying desires about money. They assist with counseling sessions on how to make a budget, plan for retirement, savings, investments and long-term financial goals.

#9. Monitor Your Accounts

This includes your digital accounts like PayPal, Apple Pay, blockchain wallet, and even social media accounts. Put in much effort as to protect yourself and your money by ensuring your cybersecurity. Digital platforms like the blockchain technology is pretty safe, however, it doesn’t mean if you’re careless you can’t be hacked. For regular accounts, make sure to turn multi-factor authentication for extra security. But most importantly, know how much money you’re transacting per each account.

#10. Track Your Growth

This is the least and underestimated. Tracking your growth means to calculate your net income throughout the course of the year. This is your estimated net worth. It doesn’t matter the size of your paycheck, your net worth is determined by (read #4 above) how much you’re making against how much you’re spending. Of course, this can be a nerve-wracking prospect, but ensure that you keep account of how richer you’re becoming. That’s the goal.

What’s even more?

What we’re always avoiding to do, but its really crucial. We all have that one thing we need to do, yet we keep procrastinating it for later (or next year). If we’ve mentioned it in the list, then this is your moment, this is your year. Make it count.

To be continued…

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Written by: Nana Kwadwo, Wed, Jan 19, 2022.



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