Financial Resolutions to Help You Put Your Best Financial Foot Forward in 2018
The holidays are an easy time of year to go a little (or a lot!) out of control with spending. It is easy to get caught up with the idea of creating the perfect holiday season, but when January comes along with the credit card bills and reality hits with your less than perfect financial situation, it can be tough for some to make a plan to get their finances back on a healthy path. That’s where our list comes in. The tips we’ve included below are not meant to solve your finances overnight, but can help make your goals more attainable. If you have any questions about how to get your finances back on track, contact a member of our financial services team, we would love to help you put your best financial foot forward in 2018!
Set a reasonable savings goal
Although many people say they want to save more, many don’t know how much they should be saving or where they should save it. A reasonable monthly savings goal to start with is 15% of your gross monthly income. An easy way to achieve this goal is to use any automatic transfer functions your banking institution offers you. This way the money is out of sight and out of mind and you can focus on the money left over to cover your necessary expenses for the month. Of course, if 15% doesn’t work with your current income and monthly budget, consider lowering your monthly savings goal or cutting costs in other areas such as entertainment to meet your desired savings goal.
Create a plan to tackle your debt
Although paying down debt can feel like climbing a mountain, it’s important to remember that with time and the right strategy you can reach the top. The first step in creating a plan to tackle your debt is to determine how much debt you have to pay off. This process can be a little scary when you see the grand debt total, but you can only begin to address the problem once you see the problem.
Once you’ve determined your grand debt total and figured out your interest rates, look for ways to consolidate your debt or lower your interest rates. With your debt and interest rates settled, you can then pick the best repayment strategy for your situation. Some people choose to pay off the smallest debts first while others choose to pay off the largest debts first. Whichever method motivates you most is the one you should pick.
Track every dollar you spend
Many who find themselves in sticky financial situations claim they “don’t know where their money goes”. This is a perfect example of mindless spending where people don’t think about the dollars and cents leaving their account when they tap or swipe their plastic cards for everything from a trip through the drive-thru for coffee or at the store when they put an extra unnecessary item or two in their cart without thinking about the cost. There are many free apps you can download on your phone to help with expense tracking, or you can input the information into a spreadsheet on your computer and make a habit of adding your daily spends in at night. Tracking your expenses makes it easier to be much more mindful about your money and spending and force you to think about what is worth spending for or what is an unnecessary purchase.
Work with a weekly cash allowance
To cut any unnecessary purchases made on plastic, allow yourself a certain amount of cash every week to live off of (typically around $50-$100). This exercise will also make you more aware of your spending and force you to be mindful about which purchases make the cut and which don’t. Mindfulness of your money is an important component in getting financially healthy, and one of the most effective ways to instill the importance of being mindful with your money is using cash because you physically see the money leaving your wallet.
Schedule financial exercises for yourself
Get your planner out and write in days to commit to financial exercises such as no spend days, where you don’t spend any money, or monthly spending bans where you commit to not spending at one of your weakness stores. By committing to these exercises you avoid the failure that comes with the “I’ll do it tomorrow” mentality.
These tips are meant to be examples of small steps you can take to work towards better financial health and are in no way a definite solution for all financial issues. For financial advice or assistance in reaching your financial goals, contact our offices to get started with one or more of our many financial products to fit your financial situation.