Make a Habit Out of It
While you may have adopted any number of New Year’s Resolutions, it never hurts to brush up on one’s money management skills. The New Year is a great time to start fresh, and adopt financial habits that will help you in the short and long term. Today we’ve prepared five quick practices to help you improve your financial standing, starting right now!
- Set attainable goals: If you have had trouble with saving or money management in the past, then this could be the most important step you take. However, it’s not just for the beginner, and even seasoned savers like meeting goals! Setting attainable goals – as opposed to lofty, distant, or very difficult ones – will help you stay focused and motivated. For example, if you want to say $10,000 over the next calendar year, try by splitting it into fourths. That way, you’re only tasked with saving $2,500 every three months. Make sure that you treat yourself in some way when you reach a goal, so that you don’t resent it!
- Automate it: In this day and age, it is incredibly easy to setup automated savings through online financial services. The single best thing you can automate this year is depositing money into your 401(k). Many companies will match up to around 3% of what you put in, which is absolutely free money – take advantage of it! What’s more is that 401(k) contributions come out of your paycheck pretax. In addition to or in place of this, you can likely automate transfers from different bank accounts. For example, if you setup a savings and a checking account with your bank, you can automate a transfer of, say, $200 every first of the month. That way, money is being socked away and you don’t even have to think about it.
- Determine your weakness: We’ve all got our own weakness when it comes to spending money. For some folks, they might have trouble resisting a new pair of shoes. Others may find that their budgetary black hole is dining out. Do a quick audit of your checking account, and add up recurring expenses until you assess where the majority of your disposable income is going. Then, make a plan to cut down. For example, if you eat out four times a week, try to cut it down to three, and then two. If you simply love shopping, forego it until you’ve hit a desired savings goal. By employing this method, you can turn habits into rewards. This will cause you to value them more, as well as helping you save!
- Make a budget! So many people abhor the budget. However, the truth is that regardless of your income level, you can benefit from having and adhering to a budget! The simple reason behind this is that regardless of one’s income, we tend to spend proportionally. While you may contend that with that new raise you’re making more – which technically is true – there’s a good chance you’re also spending more as well. Head over to nerdwallet here: http://www.nerdwallet.com/blog/nerdscholar/creating-budget/, and check out their four easy steps to get starting on making your budget today. While it is time consuming initially, you’ll find that sticking to a planned budget helps control spending and increase saving!
- Don’t put it off: This is a great tip that can be applied to many facets of life, but is particularly good for finances. Think back on 2015 – does it seem like it just flew by? If you answered yes, you can bet the same will happen with 2016! Though we as humans have great intentions, we tend to have more trouble following through with them. By setting hard goals and not procrastinating, you stand to greatly improve your chances for getting on better financial footing this year. Consider setting aside an hour a week to determine where you are, and where you want to be by the end of the week, month, or year.