6 financial resolutions to fulfil in 2023

2022 is practically over. You know what that means, don’t you? It’s time to make resolutions for the new year!

We’re sure many people have already made resolutions to start going to the gym and eating healthier. While all these sound great, we can’t help but take it personally!

Why is it that people rarely make resolutions to improve their financial health?

Joking aside, it’s important to consider your financial health with the current inflation levels and rising interest rates.

To help you, we’ve listed 6 achievable financial resolutions to improve your finances in 2023.

1. Reflect on the past year

How can you move forward if you’re stuck in your old ways? The answer is, you can’t!

To avoid making the same financial mistakes, you should review your bank and credit card statements from this year to determine where you’ve been spending the most money. Work out what needs to change and what you should keep doing for the new year.

Of course, you can also check out where you’ve spent the most on the Bank al Etihad mobile banking app. Through it, you can see how much you’ve spent on specific categories and filter your spending to see which merchants you shop from.

2. Write down your financial goals

Want to start a budget? Want to start saving 10% of your salary? Write these goals on post-it notes and stick them on your refrigerator at home or on your desk at work.

Studies have shown that jotting down your goals on paper means you will remember them much better, especially if you stare at the reminder every day. And therefore, you are more likely to achieve your goal.

So, no matter how big, small, or specific your goal is, write it down for the new year!

3. Start a budget

Once you define your financial goals, it’s time to work towards them. How? Our answer will always be the same: start a budget! At the very least, determine how much you spend (and save) from your take-home salary.

It can be hard to keep track of all your expenses, so why not create a spreadsheet to categorise and record them? You could split these into fixed costs, which remain the same each month (for example, rent), and variable costs, which vary depending on your purchasing habits (for example, food).

And if you find budgeting impossible, read this article to learn which method to practise according to your personality.

4. Save money regularly

Thanks to the convenience of bank cards, overspending can easily happen without you having to physically hand over cash. A tap on a machine here, an online order there, and you’ll have got halfway through the month with little left of your salary. However, banks have come a long way and provide customers with ways to save money just as easily through mobile banking.

For example, our app allows you to set up standing orders to automatically transfer funds to your savings account from your salary or current account.

Transferring amounts to a separate savings account is crucial, not only for your long-term goals but also for emergencies. Why? Emergencies are, by nature, unpredictable. And not to sound gloomy, but they can threaten your financial security when they happen.

So, try to set aside 3 to 6 months’ worth of living expenses. This way, you will have a reasonable reserve of cash to fall back on without going into debt if you quit your job or need to repair your car, for example.

5. Pay down your debts

Whether you’ve accumulated credit card debt this year or have taken out loans, we urge you to pay back what you owe faster.

We know there may be times when paying off your credit card balance in full is difficult. But at least pay the minimum amount required on time to avoid being subject to late fees.

Of course, we also know that credit cards sometimes make people too carefree with their spending. So, in the new year, ensure you always have enough funds to cover your credit card purchases, or better yet, try not to use your credit card while paying down your debts to break the cycle of having to pay off your credit card.

And if you need more guidance on how to use your credit card, click here.

Where loans are concerned, we have 1 piece of advice: don’t postpone your loan payments, even if you’re given the option to!

If you do, the principal portion of your monthly payment will be distributed over your upcoming instalments. However, the interest portion will accumulate into a large payment, known as a balloon payment, that you will have to pay at the end of your loan.

Don’t know what a balloon payment is? Click here to learn all about it.

Postponing a loan instalment (or multiple) may relieve you in the short term, but it means you will have to shell out a larger payment at the end.

So, if you can afford to continue paying your loan instalments on time, do so. Your future self will thank you!

6. Start investing

Earlier, we urged you to save money regularly. But saving alone doesn’t guarantee you financial wellness in the future. That’s why we recommend you start investing after you build 3 to 6 months’ worth of savings.

We know it can be intimidating to start investing, especially if you feel you lack the knowledge to navigate the markets. But a smart investing strategy can make your money work for you and help you build wealth.

One smart strategy is the automatic investment plan we offer through EtihadSaver!

Everything you need to know about it is here.

We hope you consider adopting at least a few of the resolutions we’ve listed, and we hope 2023 brings you physical and financial health!

Happy New Year!