#1 Make One
This may sound quite trivial but the first resolution is simply to make one. If you’re wondering why you are in a bad financial situation going into 2015, it is because you didn’t have a good resolution for 2014. So make a change this time – make a resolution!
#2 Stop Buying Things You Don’t Need or Want
One important aspect of saving is to engage in some form of self-examination. Everyone does it: You buy something that you know you don’t really need and realize later that you didn’t even want it. Of course you wanted it at the time of purchase – you wouldn’t have bought it otherwise. However, when you look back, you recognize that you received very little pleasure from it. Think back over the year 2014; think of purchases that were truly worth what you paid for them and of things that you bought but wish you hadn’t. One of the biggest mistakes people make when they realize they spend too much is to cut down on everything, regardless of whether they need and really want certain items. A more effective plan is to curtail spending on things that will provide the least value.
#3 Pay off High-Interest Debts First
One of the keys to financial improvement is to prioritize your debt. Many people feel so motivated to pay off their car or house that they leave high-interest debt on their credit cards. This is understandable, but the reality is that you will be out of debt quicker if you first concentrate on debt with the highest interest, which will most likely be from your credit cards.
#4 Save and Invest
If you have not started putting money aside for the future, 2015 is the year to start. Make a plan to put a certain amount each month into an investment that will yield a higher return than the rate of inflation. If you don’t have a TFSA (Tax-Free Savings Account), then consider starting one. There are plenty of investment options that can go into your TFSA. It is possible to take modest risk and get a substantially higher return than you would with a normal savings account. You might consider looking into a diversified mutual fund or something of that nature. For those who know little about the stock market and investing, you can use the services of an investment advisor or portfolio manager.
#5 Enjoy Life
When people read advice like this, it is often followed by a Doom and Gloom feeling. They think they have to stop enjoying life so much in order to start saving. Saving does not mean that you can’t enjoy life. Consuming less now ensures a brighter and more secure future. That may seem rather insignificant at present, but it is a major key to financial prosperity – and you’ll find satisfaction in knowing that your finances will be in good shape in the years to come.