As we have come closer to the end of the year, it’s time for retrospection. It’s time to keep track of your finances in 2016 and analyze your income, expenses, and spending habits to identify what financial mistakes you have done in 2016. This will help you determine whether 2016 was financially good or bad for you so you can start off 2017 on a financially positive note.
Here are 7 important financial lessons you can learn from 2016:
Start Saving Early
If you set your financial goals late in 2016, then set them up early in 2017. Start saving from the first month of 2017 and keep track of your spending habits. Set a healthy saving and spending pace for 2017.
Create a Monthly Budget
Were you not able to save last year? Make a monthly budget in 2017 to get rid of unnecessary spending and start saving. Track your expenses to know where your money is going so you can cut down extra costs and make required changes in your budget.
Make both Short-Term and Long-Term Investments
If you haven’t made any investments in 2016, consider taking both short-term and long-term investments in 2017. Don’t wait for the last quarter to start investing because this can affect your budget. Start making the investment early, the sooner the better!
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Evaluate Your Retirement Plans
Did you provide any contribution to your retirement fund in 2016? Fix this in 2017. Set up a 401(k) and max out your investment to match your company’s contributions. Assess your retirement plan to make sure you have a sufficient balance in your retirement fund.
Improve Your Credit Score
Keeping your credit score in check is very critical. If you had a bad credit score in 2016, it’s time to improve it in 2017. Start paying your bills on time to build a good credit score. Also, pay off your debts, sign up for a new credit card, and pay it off every month.
Assess Your Finances
Did you re-evaluate your finances last year? It’s time to assess your finances thoroughly in 2017 so you can make changes in your investment and save strategy or reduce your unnecessary expenditure.
Build an Emergency Fund
Faced a financial emergency in 2016 and did not have enough cash to cover up the expenses? Let this not happen to you in 2017. Start building an emergency fund to be prepared for the worst. Put 3 to 6 months of expenses in a separate account.
What financial lesson did you learn from 2016? Share it in comments!