As the year winds down, many of us are looking for ways to maximise our savings and investments as a part of our New Year’s resolutions. It’s the perfect time to start fresh and make smart financial moves that can set the stage for a prosperous year.
Luckily, we’ve got a tip that could potentially add a hefty amount to your wealth. But you’ll need to act fast—time is of the essence!
Financial experts have observed an increasing trend over the past decade, with the new year being the busiest period for people seeking to organise their finances. Unfortunately, a significant number of individuals who set financial goals find themselves failing and repeating the same resolutions year after year.
When it comes to financial matters, lost time creates an opportunity cost that can be detrimental, if not impossible, to recover. To illustrate this point, consider the following scenario:
If an individual saves an extra $10 each day and invests it based on the average stock market return of 9.8% through 2025, by the end of the year, they would accumulate $3,818. However, this is just the beginning. If a 30-year-old were to leave that $3,818 to grow without adding any additional funds, by the time they reach age 65, it would amount to a substantial $105,446.
This example demonstrates that small shifts made now can lead to significant differences over time.
Key strategies for financial success
1. Don’t wait until the new year
Many people tend to postpone meaningful plans until the start of the new year. This delay can lead to a slow start in January, as individuals ease into their routines whilst work and other distractions resume.
However, failing to make good early progress can leave one feeling behind, potentially leading to self-criticism and a cycle of guilt and shame that makes it even more challenging to get back on track.
Instead, plan what can be done now to move finances forward. This might include setting up a savings account, opening an investment app, scheduling a financial planning session with a partner, or engaging a professional for assistance.
The key is to enter January with a sense of progress already underway.
2. Invest
In the current economic climate, many people are stretched thin and struggling to find extra money for the present, let alone for future investments. However, setting aside funds for the future is essential for those who want to look back on 2025 with pride in their financial progress.
Begin a regular investment plan, even if it’s as modest as $5 per month. This establishes a foundation to build upon, and the amount invested can be increased over time. This approach allows individuals to leverage the power of the stock market and compound interest, ultimately building an additional source of income that can potentially replace a salary in the future.
3. Have a plan
Without a clear destination, it’s impossible to determine if one is on the right track or veering off course. A well-defined plan provides clear targets to work towards. Assess current financial standings and set clear targets for growing wealth in 2025. Outline the steps needed to achieve these goals.
Given the current global economic landscape and the opportunities present in investment markets, there has never been a better time to take a proactive approach to personal finance. The new year offers an exciting opportunity to capitalise on motivation and embrace a fresh start to do things differently.
Dear readers, have you taken any steps to maximise your finances? What tips can you give to help others? Let us know what you think in the comments below.
Disclaimer: The information contained in this article is general in nature and does not take into account individual objectives, financial situations, or needs. It is advisable to consider whether the information is appropriate to personal circumstances before acting on it, and where appropriate, seek professional advice from a qualified financial professional.
Also read: What big figure savings could you make?
