If you ask people that how many of them have been able to keep their New Year resolutions throughout the year, you won’t be surprised if no results turn up. It is because most of the people fail to make realistic resolutions and ignore all kinds of ways to stay on track of them.
Let’s face it, it is pretty pointless waiting all year to stop doing things that you want to stop doing, but you know really well that it is not possible to commit to the strategies anyway. It seems crazy that all planned resolutions never work perfectly.
Setting high goals all sound good on the surface but typically a resolution is based on what you think you should be doing instead of what you really want to be doing. Money is something that is closely linked with the New Year’s resolutions. It is also a major cause of stress for people because they fail to improve their finances.
Finances are a stress:
When people make New Year resolutions, they connect it improving their finances. They make the typical resolutions as saving up on credit cards, attaining a high paying job, building an emergency fund, purchasing a house, establishing a business etc. These are all great resolutions if you are capable of taking action for them but it all begins with the mindset. People tend to spend what they earn. The spending problem keeps most of the people under stress and even with high paying jobs; they fail to save money every year.
When it comes to saving money, you are required to live below your means. They best way is to start with ten percent. Once you are done with paying all your bills, you should always have the minimum amount left over. This one rule will help you to pay off credit card, purchasing a rental house, creating an investment, etc. most of the time people are unable to save even with higher income. It is because they believe that with higher income they are bound to spend more. You should always save money for buying things that are really important not on products that you can live without as well.
Net worth matters the most:
Typically people ignore their liabilities and assets and focus only on their income and expenses. Your home, furniture, investments, retirement accounts etc. are your assets because these are the things you own whereas the student loans, credit cards, mortgage are the liabilities that you owe. Subtracting the assets from your liabilities and if you get a positive number then its good. But if it isn’t then it means that living below your means will help you save more.
Change of mindset is not an overnight process, it takes time. But you need it if you want to achieve a better financial position. Once you commit yourself to follow this one resolution, all the other things will come into place automatically.