Want to have financial freedom in 2016? Well, you need to plan your finances accordingly. Otherwise, there is no other shortcut to achieving financial freedom.
If you haven’t yet made your financial resolutions, it’s not too late. Actually, it’s never too late to start planning for your finances. With some good financial planning advice, you’ll be able to make the necessary adjustments and meet your goals by the end of the year. Here are some great financial planning tips for 2016 that you should consider using to improve your finances.
• Save! Save! Save!
It really doesn’t matter whether your salary is only enough to meet your basic needs. You need to start saving now, or you’ll have nothing to show off by the end of the year.
The trick here is not to wait until you’ve met all your other financial obligations- You’ll end up using all the money before you even get a chance to save a dime. It’s about saving before you spend. Experts recommend saving at least 20% of your salary. Better still, you can have the savings money automatically deducted from your paycheck and deposited into a separate account. This way, you won’t have second thoughts of whether to save or not.
• Track your Spending
Do you create a budget every month? Probably not. One way to achieve great financial success this year is to track every single cent you spend. That’s right. You need to know where your money is going month after month.
If budgeting is the problem, there sure are many budgeting tools available online. Use them and you’ll never again wonder in which hole your money slipped into. Make budgets for the groceries, other food stuff, house bills (energy, gas, bus fare, car fuel…e.t.c). Develop this habit and you’ll never again struggle with spending problems.
• Improve Your Credit Score and Obtain Reports
At some point, you’ll require a loan to pay off debt, a mortgage, or capital to start a business. However, if your credit score is bad, you can be sure that no lending institution will offer you any loans. Therefore, if your credit score is bad, now is a good time to improve it. Start off by making small repayments.
Also, it’s advisable that you obtain your credit reports on a regular basis. The reports will give you accurate information on your credit history and also allow you to identify errors. Obtaining credit reports is also a good way to check whether you’ve been a victim of identity theft or not.
• Start Investing
Haven’t made any investments yet? Well, it’s not too late either. You still have time to put some money into investments. Invest wisely and watch your money grow.
• Create a Retirement Savings Plan
According to financial experts, saving for retirement is one of the most important steps towards ensuring financial security in your senior years. If you are 30 and save at least $5000 annually, you’ll have accumulated a total of $150,000 in 30 years. Now that’s a tidy sum right there.
• Review your Insurance Coverages
Some insurance agents usually push clients into buying more insurance coverage than they really need. For example, they are coaxed into buying whole-life policies while term-life policies would make more sense.
Now is a good time to review your insurance coverages and adjust them according to your specific needs.
• Create an Emergency Fund
Financial experts recommend having about 3 to 6 months worth of emergency living expense money. Lack of emergency funds can lead to car repossession due to emergency financial constraints, home loss or foreclosure. Furthermore, you can imagine what sudden loss of employment would do to your family.
Making financial decisions can sometimes be hard especially during these hard economic times. However, proper planning can go a long way in helping you achieve financial freedom this year. Use these financial planning tips for 2016 to achieve financial success and improve your life.