Did you make any New Year’s Resolutions? It’s not too late to incorporate better financial habits into your plans for 2017. These ideas may add momentum to the positive changes you’re already pursuing.
- Put your goals on paper – Consider what you want to accomplish this year and in the years to come. Whether you’d like to go back to school, start a business, purchase a home or simply boost your emergency savings, it’s worth it to write your goals down. Having a record of your goals can make them more “real” in your mind and serve as a reminder throughout the year.
- Track your spending – Keeping tabs on every dollar you make and spend is the first step toward establishing better financial habits. Whether using free online software, purchasing a program or writing in a notebook, keeping track of your spending can yield insights on where your money goes and help you make better choices.
- Cut your credit card debt – Credit card debt may seem like a burden that will never completely go away, but with commitment and a little know-how, this can be the year you tackle those balances. Start by contacting your credit card company and ask about a reduced interest rate. If possible, transfer your high-interest rate balances to a lower-interest card. Then make more than the minimum payment each month – as much as you can – and make sure your payments arrive on time. Your credit card company could charge high fees for being even a day or two late.
- Save, save, save – If you don’t participate in the Thrift Savings Plan, an employer-sponsored 401(k) or a plan for the self-employed, this is a good year to start. Federal government employees and civilians should contribute at least enough to earn an employer match, if one is offered. Also take a look at your emergency savings – this is the cash you keep on hand for unexpected expenses, whether that is a car repair, plumbing emergency or something similar. Set aside a small percentage of each paycheck to boost this account, especially if you’ve had to dip into it in the past year. And remember, you also want to aim to have about six months of expenses in a savings account in case of job loss – this goal can be more difficult, but using a little-by-little savings approach will move you toward it.
- Trim your miscellaneous expenses – In addition to mortgage or rent, insurance, groceries and utilities, you’ve probably got expenses that don’t really fit neatly into one category. These miscellaneous expenses – eating out, gifts, clothes and entertainment – can really add up. Make a commitment to cut 10, 20 or even 30 percent from your miscellaneous category, and you’ll be on your way to big savings in the New Year.
A final thought: New Year’s resolutions are notoriously difficult to uphold – whether it’s losing weight, spending more time with family or getting your finances in order. Enlist help from a friend or family member to hold you accountable and offer to do the same for them. You may be more inclined to stick to your goals if you’re held accountable by someone you trust.