With a new year comes new plans for many things in our lives, with finances normally high on the to-do list. Whether you want to save more, take out further borrowing or reduce debt, you’ll need a plan of action of where to begin. To help, here is our quick guide to 5 yearly finance goals everyone should have.
Find specialist lenders
If you are in a specific need for a loan, you’ll want to identify specialist lenders that can help you. As not everyone will have a perfect credit rating, there are loans for bad credit that provide quick funding to cover emergency expenses that focus on what you can afford to pay. These are ideal for the short term, where something like a personal loan is more suited to borrowing large amounts over many years. Specific lenders for business loans, home improvement loans or even car loans are all examples of loans designed for specific use. If borrowing is a goal this year, determine your credit status and your budget before proceeding with your preferred lender.
Pay off high-interest debts
If reducing debts is high on your financial goals this year, you will want to start with those that yield the highest interest each month. Credit cards, for example, can be one type of debt that can quickly grow if only the minimum payments are made, and you are outside of any promotional period. As they are convenient to use, you may have found it difficult to break the cycle of making purchases on top of existing debt. If you do have multiple products that you repay each month, focus on those that have the highest interest amount and reduce. Products like personal loans already have a fixed interest amount applied at the beginning, so instead of reducing these first, focus on those that are increasing your debt each month.
Invest in your future
Whilst some people find investing their money easy, many others will either prefer to put this into a simple savings account or leave in a current account. However, doing so will mean a lower return on your savings than if you choose to invest an amount into stocks or shares, for example. If you are looking to invest for the first time, you should ensure the amount you choose is affordable and you are happy to take the risk. As any type of investment is not guaranteed, your money can go up as well as down. By speaking to a financial advisor, you can look to diversify your investment amount and get insights on where best to invest to help grow your savings fund.
Build emergency savings
We all know the unexpected bill or expense can crop up, so being as prepared as possible can ensure you are ready. One of the best ways to do so is by having an emergency savings fund you can access, and it’s easy to start creating one. Rather than using your existing savings, you should aim to have a separate account for this that is only used to cover emergencies. Most people aim to have at least 3-6 months’ worth of monthly expenses saved here just in case they cannot work or are long term sick. Of course, this can take time to build, so by saving into this regularly, you can quickly build a fund. In the long-term, this will avoid over-reliance on having to borrow money too.