The charm in the new beginnings, especially when a person consciously commits to themselves to change their life, is the most significant and decisive step toward a better life. However, one fundamental factor that has surpassed every element in our lives is ‘money.’ To put it simply, we are disturbed and anxious. But don’t worry; this article will work for a financial advisor and a therapist because managing personal finances relates to learning a few motivational tips and is interrelated to how we are evolutionarily wired to treat money (our psychology of finances).
Before starting, I want to ask how you perceive the word ‘resolution.’ How encouraging does it sound to you? And why do you look forward to creating a difference in life every year by writing new resolutions? Let me point out that we sometimes proceed with an action without knowing its purpose. The purpose and the true meaning behind the word ‘resolution‘ are to ‘make a firm decision to do or not to do any action, the quality of being determined or resolute, or the action of solving a problem.’ If we take out the bullet point, it is determined to solve our problems. Here, we will focus on creating financial resolutions that instill courage, commitment, and self-discipline. You cannot change the condition of your life if you don’t change your state and are not willing to do it. No matter how many resolutions you may have made, it won’t be beneficial if you are not committed to it. So, let’s commence by promising ourselves a financially independent future.
Jot Down the Financial Goals you are Aiming for this Year
It’s time to know what you want from life
Why do you want to create wealth? For what reason? Is it because you want to buy your dream house and repay the mortgage? Pay off your debts? Afford a luxurious lifestyle? Give your children a good education. Or provide your family with a beautiful life? Maybe you don’t want your children to go through the poverty you have experienced, or are you tired of living paycheck to paycheck? Do you want to create substantial investment income to retire early? Or build a society and give back to the community?
Whatever the rationale, no matter how insignificant, selfless, selfish, or trivial your aim may be, knowing it and being honest about what influences you is essential. The focal point is that you must have a ‘goal’ that you aim to achieve. Therefore, it is imperative to gravitate to the intensity and understand what motivates you. This inculcates a sense of responsibility in our minds and pushes us more towards our aim. Furthermore, how long will it take to accomplish your financial goal? For clarity, write down your plan with a time limit on the right side of the paper.
Do You Want it to be Easy?
Financial success is often avoided because it usually smells like hard work
From professional insight and approaches from millionaires and billionaires, success takes time and effort. Studies have confirmed that wealthy people have a strong work ethic. Princeton’s Professor of Sociology, Dalton Conley, discovered that those with higher incomes work more hours than those with lower incomes. However, you shouldn’t copy them and lose work-life balance to become wealthy. Still, the notion behind this strategy is that if you work 80 hours a week compared to a typical person’s 40 hours a week, you can attain what others take a year to accomplish in six months.
However, this strategy requires clear priorities and goals. As we mentioned, you cannot change your state if you are willing to, so commitment is necessary here!
Creating a Budget Assists you in Knowing Where your Money is Coming and Going
Spoiler: keeping track of your spending can be a bit demanding, but it is genuinely fruitful. You may never see a list of your payments collected on a debit card or direct debit. Still, maintaining a household budget leads you to the path of financial enlightenment.
Ignoring your monthly spending can result in financial crises and a dark future. This year, initiate a compelling and honest budget plan.
Clear off Unproductive Debts
Debt has the potential to twist even the happiest person. Suppose you are drowning between paying off the debt and meeting your ends. In that case, it’s a big time to decipher between productive and unproductive debts. Now, what are productive and unproductive debts?
Productive debt is helpful—the borrowings you took out to invest in a property or fund your business. This kind of debt provides you with rental and dividend income. Furthermore, it produces sufficient income flows to cover the interest charged on initial borrowings.
Unproductive debt- this debt can cripple you with its high fees and interest payments if not managed effectively.
Make Room for Giving, and You will Receive it Unexpectedly
You won’t carry your health with you; hence, give it to others. Research has shown that satisfaction and well-being while donating small sums improve to the same degree as if you have provided more significant amounts to people who donate small amounts. Develop a broad mindset. Generosity comes back in the most unexpected ways. This year, help those around you.
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