8 New Year Resolutions to Adopt to Build More Wealth

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New Year resolutions can be useful tools for personal growth and life enhancement – as long as you stay committed.

By setting clear, well-defined resolutions, we can use New Year resolutions to increase our focus and accelerate wealth building.

When we explicitly state our resolutions, we become more likely to commit to them.

Even better? Write it down and place this note prominently where you can see it every day.

The process of setting resolutions encourages self-reflection. This is valuable as it can help you evaluate your core values and priorities.

Let’s explore 8 New Year Resolutions you can adopt to accelerate your wealth journey.

This article was written by a Financial Horse Contributor.

Retirement Planning

1. Maximize Employer Benefits

Take full advantage of CPF and SRS. Don’t leave free money on the table!

    Check out our guides here:

    Investing

    2. Optimize Investing

    Here’s a quick primer on how to optimize your investment strategy for maximum effectiveness.

    Strategic Asset Allocation

    Diversification
    Take time to relook at your portfolio.

    Is it well-balanced portfolio across different asset classes, sectors, and geographical regions?

    You want to set your asset allocation based on your risk tolerance and time horizon.

    Regular Rebalancing
    Year end is a good time to rebalance.

    This ensures your investment mix stays aligned with your goals and risk tolerance.

    It may also be time to revisit your risk tolerance based on your forseeable circumstances for the upcoming year – are there any major life changes or expenses?

    Take a look at your investing mistakes for the past year – what have you learnt & what changes can you make?

    Implementation Techniques

    Dollar-Cost Averaging
    Most people can benefit with a form of DCA strategy for their portfolio.

    See how you can integrate this strategy into your portfolio so you can build wealth on “auto-pilot”.

    Cost Management
    Take a closer look at the fees you are paying, can they be optimized further?

    Risk Management
    Besides chasing for returns, risk management is an equally important pillar of investing.

    Implement proper risk controls by:

    • Understanding your personal risk tolerance
    • Setting clear investment objectives
    • Using appropriate position sizing
    • Maintaining adequate emergency funds

    Savings and Cash Management

    3. Upgrade Your Savings Strategy

    All “idle” cash should be maximized. Take a look at all your accounts and try to organize them so that your spare cash in concentrated in high-yield savings accounts.

    4. Relook your Emergency Fund

    Generally, experts recommend an emergency fund equivalent to 3 – 6 months of living expenses.

    Keeping it in a liquid savings account or short-term bonds with no withdrawal penalty e.g. SSBs, or T-Bills.

    It may be time to relook your emergency fund – do you have enough? Do you need to replenish it?

    Is it just sitting there not earning enough interest?

    Financial Planning

    5. Revisit your budget

    If you don’t already have a budget, it’s time to do one! A bare bones one will do as well just to have an idea of your income and expenses.

    If you already have one, it’s a good time to revisit it – do you need to make any changes?

    Can you be stricter with yourself?

    Or do you need to make some adjustments so your budget is more realistic to your lifestyle?

    Having a budget is also a good way to figure out your disposable income so you can automate savings transfers to various investment vehicles.

    Use budgeting apps to track spending more conveniently.

    6. Review Long-Term Financial Plan

    Assess your current financial situation and long-term goals.

    Are you on track?

    This is especially important given recent inflation trends.

    If you have a partner, reviewing your long-term financial goals together is also a great idea.

    BTW – we share commentary on Singapore Investments every week, so do join our Telegram Channel (or Telegram Group), Facebook and Instagram to stay up to date!

    I also share great tips on Twitter.

    Don’t forget to sign up for our free weekly newsletter too!

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    Debt Management

    7. Manage Debt Strategically

    Focus intensively on eliminating high-interest debt, particularly credit card balances, if you have any.

    A targeted debt elimination strategy can involve either a debt snowball or avalanche method.

    You need to manage bad debt immediately and effectively, so you can start building wealth meaningfully.

    If you have good debt like a mortgage, it may also be a good time to look at the numbers and see if refinancing is an option.

    8. Optimize Tax Efficiency

    Tax is sometimes an overlooked piece of the puzzle.

    For personal income tax, are you getting all the reliefs and rebates you can have? If you have some downtime during year-end, it is a good time to revisit this information so you are ready come next year.

    Check out Tax Rebates and Reliefs you need to know about (2024) for Singapore residents.

    If you’re a business owner, consider consulting a financial advisor or accountant for tax reduction strategies.

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