16:30 30 December 2014
By now, your holiday festivities are proceeding with full vigor. Perhaps you started thinking about 2015 already. New year means resolutions. So do your resolutions include anything about your finances? Before you step forward to set any financial objectives, you need to critically review where you stand financially.
For all those retirement planners out there, what is your tolerance level for risk? Is it high or low? If you are just about to retire, your tolerance level will probably be lower than someone who has just started their career. It is no rocket science that higher risk yields greater returns, but, in worst cases, it can also result in great loss. Be aware of your risk, regardless of whether you are just starting or not. See how comfortable you feel, and if need be, adjust to whatever you feel comfortable. Profit or loss, it will at least not keep you up at nights.
Do you have enough money to save by the time the month ends? Chances are you may not think so. Monitor your spending so you can realise if there are any ways to save more than you do now. For example, the money you spend on cigarettes, alcohol or eating out. Have you an emergency fund? How much do you set aside each month for the emergency fund? If you do not know what it is, now is the time to learn. Perhaps you may want to set that as a resolution for the new year.
Recurring bills such as rent, utilities, savings, and groceries can be cleared off by using auto debit. Do you have such a setup? With such a setup in place, you do not have to fret about your payments getting behind or being late. Bear in mind that missed or late payments can have a bad impact on your credit rating.
A year-end review of your financial health will go a long way in making sure you set the right goals for 2015. Try finding answers to these questions in bold and see if you can make some resolutions this January.