New Year’s Resolutions. We all start fresh on January 1st wishing for a productive and lucrative year.
We vow to save more money, go to the gym more often, cook healthier meals. It’s the best time to get your finances on track and start fresh for the next 12 months.
Every year, only about 8 percent of people accomplish their resolution goals. If you want to become part of the 8 percent, you must know what you need to do to achieve financial success.
Break your plans down into these small steps to help you focus and make better choices.
1. Set a Savings Goal
Having a savings account is the most important thing you can do for your finances. Avoid picking a number based on “experts,” though. The experts may know finances, but they don’t know your personal situation. Create a list of your expenses compared to your income.
Once you know how much money you have left after your bills each month, you can set a realistic savings goal.
Can you afford to save $200 per month? Awesome!
Can you only afford $20 per month? That $20 amounts to $240 at the end of the year, which is still a good start.
It’s important to start saving and get into this habit, even if it means 10 bucks sometimes or 100 bucks, when you have more money.
2. Curb your spending
Can’t live without your Starbucks coffee? You should.
By spending $25 on average in a week for your pleasure, you waste over a grand in a year’s time. That money can easily be sent into a bigger emergency fund or a vacation with your family.
Even if you still drink your joe 2 days a week (and brew it at home the other days), you can already save $870 in a year’s time.
That’s nothing to frown upon.
Cable is expensive and you really don’t need it. Use Netflix or Hulu.
You should limit your TV time and maybe watch something educational, such as an Udemy course. Who knows, that might actually help more than mindlessly switching channels all day long.
3. Check Your Credit Report
If you don’t have a good credit score, you’re less likely to be approved for everything from a car loan to an apartment.
You can get up to three free credit reports per year by staggering your requests to the three major personal finance credit agencies.
Each time you check your report, dispute any items that you feel are incorrect or that you can prove you’ve already paid.
If you have debt, start paying it off.
Pay off the high interest debt first, since it’s the one that’s causing the biggest money ‘bleeds’, then work your way to the low interest debt.
4. Use the Right Type of Credit Card
Credit cards get a bad rap, but the reality is they can create a better financial profile when used responsibly. If you need to build better credit, get a card with a small limit, use it to pay for something every month, and then pay the debt in full each month.
Soon, you’ll begin to see your credit score rise.
If you already use credit responsibly, consider if you can improve your usage in other ways. Do you earn thousands of flight points but never fly anywhere? Find a card with an excellent cash back reward instead and bring in some extra money each month. Bonus points if you put that earned cash right into your savings.
5. Track Everything With an App
The President and CEO of CURO Financial Technologies Corp, Don Gayhardt, is a huge fan of tracking expenses with apps.
Mobile and web apps are convenient, not to mention aesthetically pleasing, which may make you more interested in using them.
Some apps, such as ChangEd, focus solely on helping you pay off old debt. Others, like Mint, allow you to track everyday expenses while you’re on the go so that you don’t forget to enter them into a spreadsheet at the end of the day.
2019 is only a couple of months away. If you want to feel more financially secure next year, start creating a game plan now. Preparation will help you enter the new year with a solid understanding of your finances and feel more confident in your spending choices.