Another year is almost here, and with it, a chance to get your finances in order. Whether you’re interested in achieving short-term or long-term financial goals, a little planning goes a long way.
We’re here to help with some practical advice you can put into action immediately to see real (and lasting) results, regardless of your financial situation.
Sit down and figure out a monthly budget
A budget is your map as you start your journey towards financial success. Without it, you have no idea where you are or where you’re going. So if you don’t have one, this is the year to finally take the time to figure out a budget, then stick with it. As long as you can estimate how much money you’ll have each month, it’s not hard to do. Just tally up your monthly expenses — things like rent or mortgage, utilities, cable and cell phone service, credit card/loan payments, etc. — then subtract from your post-tax income. What’s left is what you’ll use for savings, groceries, clothing, dining out and so forth.
Look for ways to cut down on spending
Budgeting doesn’t mean you can’t have any fun. But, in order to reach your financial goals, it’s important to examine your spending and see where you can cut back. Expensive daily coffee drinks add up. So do carryout lunches during the workweek. Consider bringing lunch or substituting fancy lattes with a rich brew from home. Maybe subscribe to an online streaming service in lieu of cable or use an exercise app instead of paying for a gym membership. Small sacrifices can add up to big savings over the long run.
Stop spending money you don’t have
This one is simple in theory, but can be difficult to execute, especially if you’re used to charging things to credit cards. Whether it’s a new pair of boots or tickets to the big game, stop and ask yourself if a potential purchase is something you need or simply want. Differentiating between “want” and “need” can have a huge, positive impact on your budget. You’ll be surprised by how fast you’ll catch on to the difference, then adjust your spending accordingly.
Develop new financial habits
It’s amazing how we can develop bad habits and then stick with them, even if they’re dragging us down. If you don’t typically pay your bills on time, set up calendar alerts and pay them the day they’re due (or earlier)! If you don’t regularly check your credit, start checking it at least once a year. Wasting money on takeout and restaurants? Start planning your meals and eat at home. No matter how long you’ve been stuck in old patterns, it’s surprising how quickly you can develop new financial habits (ones that will boost your budget and your morale).
Set up automatic savings
Saving money can sometimes seem like an intimidating, perhaps even impossible, venture. But “round-up” apps make it so easy you’ll barely even realize you’re doing it. Every time you make a debit card purchase — let’s say a trip to the grocery store for $18.75 — the app rounds up to the nearest dollar, 25 cents in this case, and deposits the difference into your savings account. It’s a surprisingly effective way to save. You can even invest, depending on what app you choose.
Small changes really can add up
The new year is a great excuse to get a fresh start on your finances. It may sound cliché, but when it comes to financial planning, small changes really can add up — and make an immediate difference. They don’t have to be painful. And you’ll be rewarded with the peace of mind that comes with finally getting your finances in order.