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January 10, 2024

Do Your New Year Resolutions Include Planning For Enjoyment?

by Team Rowling

Financial resolutions for more enjoyment this year? Yes, please!

The new year has just begun, and for now, all of us are motivated to achieve our New Year’s resolutions. New Year’s resolutions often include living healthier, improving work-life balance, and (we hope) improving finances by clearing debt, investing more, or reducing taxes for next year. All great resolutions! But what about resolving to also enjoy life a bit more this year?

To achieve your resolutions, it’s essential to enjoy the journey and celebrate the wins along the way. Effective financial planning can put you in a financially secure position to meet your goals and get more enjoyment along the way. In this article, we’ll share how this is possible and some of the things you can do to achieve financial freedom and plan for more enjoyment this year.

Financial resolutions for more enjoyment in life.

How Does Financial Planning Help You Enjoy Life Now?

In a recent Motley Fool Ascent survey, respondents cited expense and a lack of financial readiness as key reasons for them not achieving their financial resolutions in the preceding year. When it comes to making New Year’s resolutions and having fun, financial planning is of utmost importance. It’s basically the process of assessing your income, expenses, taxes, and savings to determine your current financial health. Planning your finances can help you enjoy life in a number of different ways, which include:

1.     Reducing Stress About Major Events Or Purchases

All of us, regardless of where we are in life, experience events requiring significant monetary commitment. This may include buying a house, starting a business, getting married, paying for kids’ college tuition, etc.

Even joyful events, along with their associated expenses, can cause severe stress. In fact, a Thrive Global survey indicates that 90% of Americans believe money impacts their stress levels.

In addition, 65% believe their financial difficulties are at a point where they can’t overcome them. When you have your finances in order, you can plan and invest for big purchases and life events in advance, allowing you to relax and enjoy today—and during the event!—rather than stressing about what’s next.

2.     Helps You Build An Emergency Fund

Life is filled with uncertainty, and events that we haven’t planned for can occur at any given moment. A common example of such expenses could be someone losing their job due to economic conditions.

Needless to say, experiencing such uncertainty in life could cripple a person financially without adequate savings to rely on. You can’t plan for all of life’s unknowns, but situations such as a sudden job loss can be managed efficiently if you’ve created an emergency fund sufficient for six months or more in your financial plan. This can be used for necessary expenses as you try to find alternate income opportunities.

3.     Allows You To Pay Off Debt

Did you know that the average debt in America is nearly $60,000? (!) Owing such a significant amount does, indeed, impose certain restrictions on a person as far as financial freedom, achieving New Year resolutions, and enjoying life are concerned.

However, effective financial planning includes planning for paying off any existing (or future planned) debt. This involves carefully examining your income and expenses to determine the best method for paying down, and eventually paying off, your debt: the snowball or avalanche method. The first one entails clearing your smallest debt first while making minimum payments on all others. The latter, while requiring minimum payments on all debts, focuses on clearing debts with the highest interest rate first.

4.     Enables You To Invest

Savings are an essential part of financial planning and life overall. However, there are certain things with monetary requirements that often cannot be met with savings alone. Some common examples might include early requirement, tuition for your kids, and so on.

One way to fund some big-ticket goals without wiping out your savings is to invest in profitable assets. Financial planning allows you to create a budget that accommodates your expenses and allocates a portion of money for investments.

Investing to create passive income can boost your monetary capability, giving you the financial freedom to work towards your New Year resolutions while also having fun and enjoying life along the way.

5.     Aids In Developing Better Habits

38% of Americans believe better spending habits will help them make their financial situation better. If you’re one of those people, know that financial planning can help.

When you plan your finances, you’re better able to understand your cash flow. What this essentially means is that you can predict your income and expenses and save more money.

This can help you break free from poor spending habits. Believe it or not, when you’re aware of your financial position, you’re less likely to give in to impulsive desires, allowing you to develop better financial habits.

How Can You Effectively Plan Your Finances To Meet Your Resolutions?

A financial plan is something that’s unique to every person and based on their goals and ambitions. However, there is a general approach you can follow to make your financial planning more effective. To create a financial plan, you should:

  1. Develop financial goals for a one-to-five-year time period.
  2. Track your income and expenses to create a budget.
  3. Plan ahead for taxes and determine how much you’ll have to pay.
  4. Identify your debt and decide on an approach you’ll use to clear it.
  5. Determine how much money you can contribute to an emergency fund.
  6. Explore and invest in insurance and retirement plans.
  7. Set money aside for investing in assets that generate passive income.
  8. Determine how much you can spend on social or leisure activities.

We’re Here To Help

Everyone has ambitions to make their New Year resolutions succeed in the first couple of months. However, as the year progresses, we lose motivation and often give up on most resolutions. To stay motivated, it’s essential to have a financial plan to help you meet your goals.

Having your finances in order helps give you the financial freedom you need to enjoy life as you meet your New Year’s, and long-term, financial resolutions. Learn more about our Financial Planning services or contact us to discuss how we can assist you with a customized financial plan for your own unique financial needs.

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