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The New Year Is Here, It's Time for Preplanning

By Saghir Aslam
Rawalpindi, Pakistan

(The following information is provided solely to educate the community about investing and financial planning. It is hoped individuals will benefit from this effort through greater financial empowerment, enabling the community to live securely with dignity and fulfill their religious and moral obligations toward charitable activities.)

How often have you drawn up an ambitious list of New Year’s resolutions only to find you’ve given up on them after a few weeks?

Don’t let that happen to you in 2025. If you want to make significant strides towards achieving your financial goals, determine why your resolutions have failed in the past and find ways to overcome those obstacles.

We make resolutions because we really want to change some aspect of our lives. However, the reason why we have to make resolutions is because it is difficult to get these things accomplished.

If it were easy, those things would already be done. Thus, if you want to achieve your resolutions, follow these tips:

PUT YOUR RESOLUTION IN WRITING. Doing so will go a long way in helping you achieve those resolutions. It is estimated that people who write down resolutions are 10 times more likely to alter their lives to accomplish what they want than those who don’t make resolutions.

MAKE YOUR RESOLUTIONS SPECIFIC AND ACHIEVABLE. Rather than making vague or very broad resolutions, set smaller goals you know you can reach. Once you achieve these smaller goals, you may find it easier to pursue more substantial goals.

DON’T EXPECT PERFECTION. Changing any behavior is tough, and you should expect that you might slip along the way. Don’t use all that as an excuse to abandon your goals. Shake it off and keep pursuing your goals. Sometime you may have to amend making changes; if necessary, go ahead and make changes. If you’re looking to shape up your finances, consider these resolutions.

SPEND LESS THAN YOU EARN. The amount of money left over for saving is a direct result of your lifestyle. Since you will typically want to continue the same lifestyle after retirement, your lifestyle decisions will impact you now and, in the future. To get a grip on your spending, take time to analyze your expenses, and to set a budget. Try to reduce nonessential expenditures or find ways to spend less money on the same things.

SAVE THE MONEY BEFORE YOU SEE IT. If you have to find money every month to save, you’ll probably find there isn’t much left after paying all the bills. Typically, a better strategy is to set up an automatic savings program where money is automatically deducted from your bank account every month and deposited directly into an investment account. Another good alternative is to sign up for your company’s 401(k) plan, having funds withdrawn from every paycheck. Remember that an automatic investing program, such as dollar cost averaging, does not ensure a profit or protect against a loss in a declining market. Since such a strategy involves periodic investment, consider your financial ability and willingness to continue purchase through periods of low-price levels.

DON’T LET DEBT SABOTAGE YOUR GOALS. Strive to eliminate all debt except your mortgage. Pay cash for all purchases so you won’t incur additional debt.

INVEST, DON’T JUST SAVE. The ultimate value of your investment portfolio is a function of two factors: how much you save and how much you earn on those savings. Become comfortable with various investment alternatives, so you‘ll feel more comfortable investing in more aggressive alternatives that offer potentially higher rates of return. Even small differences in your long-term rate of return can significantly impact the ultimate size of your savings. When investing, do not go for high flyers. You need to research; if necessary, get a matter of fact, I will suggest getting help from a financial advisor.

(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds, or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)