Being a finance guru, I tend to get excited around New Year’s.
It’s a chance for me to look back on the year that has been, 2017, and look forward to 2018 with optimism.
My 3 Financial Resolutions For 2018
In the spirit of New Year’s, I want to wish all of our Rask Finance and Rask Media readers a Happy New Year and share my top 3 goals/resolutions for the coming 12 months.
Hopefully, you can use them to better invest your energy, time and money in 2018.
1. Invest in Yourself.
For over 200 days in 2018, most of us will work our butts off. 8am to 6pm, 5 days a week.
Some of us will earn $20 an hour, some $50, or even $200 an hour. But we’ll all question if it’s worth it. Working for the man.
You’re not alone.
I’ve said for many years that the best investment anyone will ever make is in his or herself. Whether it’s a hobby, exercise, our relationships (see below), study or something else, the most important client or customer you’ll ever have is you.
Billionaire Charlie Munger, a lawyer by trade, would ‘pay himself’ an hour each day when he was in his 20’s. He would read, eye up an investment or learn about a topic from a different field. You can do it, too.
And if you’re like me (you have no time to ‘invest in yourself’) you might have to get creative. Use your daily travel on the train or in the car each day. Make it your time.
In 2017, I woke up an hour earlier than my wife to read 20 pages of my favourite book or blog at the time. In 2018, I’m giving myself 2 hours a day to read and learn a new computer programming language. Neither of them will make me money, but it’s something I enjoy and I’m upskilling.
Don’t know where to get started?
Listen to a podcast, read a book or watch a YouTube video.
- How I Built This (for entrepreneurs and pretty much anyone interested in anything)
- Invest Like The Best (for serious investors)
- Collaborative Fund (or anything written by Morgan Housel)
- Dividends Down Under (one of Australia’s best personal finance blogs)
- Scott Pape, Barefoot Investor (for a laugh and real money advice)
- Rask Finance (our 100% free videos and courses on share market investing, superannuation, tax and more)
- Khan Academy & TheNewBoston (for anyone interested in learning about science or programming)
2. Float Your Financial Goat
In 2017, my wife and I had to rejig our budget. We wanted to save more money but I quit my job to start a business.
Our biggest struggle with our new and improved budget was a lack of a ‘float’. We set up our budget (10% for luxuries, living expenses under 70% of our income, etc.) but we came unstuck at the beginning when big bills were due at once. We didn’t boost our account balances enough at the start of the year, which left us falling short at times and feeling under pressure.
Our goal for this year is to start 2018 by boosting our float. Our goal is to reach 6 months of total living expenses but to get there we’ll need to sacrifice other luxuries in the first few months.
If you’re starting a new budget, don’t be too hard on yourself initially. Especially if you don’t have a float to begin with. Use an app or calculate your expenses over the coming year to plan ahead. Give yourself a buffer and keep your head up.
3. Pay Yourself 10%
Pay yourself at least 10% of your income (wage, salary, etc.). It’s this 10% — not the other 90% — that will change your life. Save it. Then invest it for the long-term. It should be in addition to the 9.5% Super you receive.
After 10 years, if you invest it wisely, the 10% of your income which you save should be earning you more than your yearly wage. It takes hard work and a focus on costs.
Download the free MoneySmart app and fill in your expenses every night at dinner. Alternatively, look at your spending last month and cut the fat. Can’t save the minimum 10%?
Start with 1% of savings in January. 2% in Feb. 3% in March and so on. Very soon you’ll be addicted to saving.
Don’t know how to invest? Take our free shares investing course.
Thank you for a great 2017. Onwards and upwards to 2018!
P.S. Here’s A Bonus Resolution for 2018: Give More of Your Energy to The People You Love
In 2018, I’m giving more of my energy to the people I love. Why?
Aside from the fact that they deserve it, we are the average of the 5 people closest to us. At home or work, who are the 5 people closest to you?
It’s biology. We are what we eat and we are who we meet.
Sure, you’re busy. You’re at work. You’re driving. You’re working out.
But it doesn’t matter. Your tombstone won’t read: “he was a really good worker” or “her glutes were toight”.
It’ll say, “A great husband, brother and dad” or “the kindest person you never met”.
Take some time and energy and give it back to the people you love in 2018.
Listen to them. Ask them for advice. You’ll be a better person for it.