Hands up, how many of us have made new years resolutions this year? Eat healthier? Become more organised? Save more?
Statistics say that 44% of us started 2016 with a financial new years resolution, and statistically 22nd January (aka Fail Friday), was the day that most of these resolutions had already fallen by the wayside.
Of all European countries, UK nationals were the least likely to have a financial new years resolution (27%), followed by Germany (30%), and Austria (35%). But citizens of these countries were also the ones most likely to stick to their resolutions.
But don’t let these puny statistics put you off making and sticking to your financial resolutions. I have searched the internet and listed the top 6 financial resolution ideas to enable you to see through 2016 with ease.
- Spend less. Obviously. This is the most common new years resolution, and is especially relevant in the life of an expat. My clients tell me that Dirhams are like ‘monopoly’ money, and it is easy to lose track of how much it is worth in their home currency. Our friends at Fidelity Investments say that in order to spend less, we need to review things like how many times we eat out, and how often we go for those impulse purchases. Pretty sound advice.
- Save more. Spending less is one thing, but actually putting money away for the future is another. It’s a good idea to open a separate savings account, preferably one without an ATM card, in order to stash your spare cash.
- Prioritize. A good benchmark to remember is 20% of your monthly income should go towards financial priorities, including life insurances, pensions, and other savings for the future.
- Invest more. We should have a minimum of 3 months salary in a bank account as an ’emergency’ fund. This gives us an accessible safety net should we suddenly become unemployed or have an unforeseen expense: but it also won’t earn us any interest. This is why savings over and above this, if not needed immediately, should be placed into an investment with returns that beat inflation – meaning your money is keeping up with the cost of living each year.
- Pay off debts. It’s always a good idea to pay off any outstanding debts that you have. Interest rates on credit cards and loans will be higher than returns given to savings in a bank account, so it’s good to get these paid off and out of the way. The relief that you’ll feel will be worth it.
- Learn more about your finances. Make a point of knowing your bank account and credit card interest rate. Take a few minutes each week to look at currency prices and how world markets are performing. We are all affected, especially as expats, by changing market conditions. Knowing how your investments are performing and how much your savings are worth in your home currency will pay dividends in the long run.
Want to talk to me? Get in touch using the below channels:
- Twitter: @ckadvisor
- LinkedIn: Chris Keeling DipFA CeSRE
- Blog: christopherkeeling.wordpress.com
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