Yes, I know New Year’s was two weeks ago, but I just got back from a month of travel and I’m ready to tackle my finances for the upcoming year. Here are 10 things I’m doing (and you can also) to ensure a prosperous year ahead.
Over the last few years I have found that improving your financial health is a lot like losing weight or dropping a bad habit— it’s easier done in baby steps. For example, if you are trying to get out of debt, suddenly pledging to stop any kind of discretionary spending until you are debt-free isn’t likely to work. If you’re accustomed to morning coffee and weekend trips to the mall, you are going to experience some spending withdrawal.
In fact, you may end up spending nothing for a month only to go on a shopping binge and wipe out the progress you made. That said; here are 10 easy financial resolutions I am making that might also be able to help you improve your bottom line.
No New Credit Card Debt
If you’re in debt – and even if you aren’t – you can’t get your head above water if you’re still sinking. Even if you can’t yet afford to make more than minimum payments on your credit cards, pledge to stop using them. Cut them up, freeze them, throw them in the blender. Don’t charge anything in the new year.
Choose a Specific, Achievable Amount To Save
Even if conquering debt is your financial priority, I recommend you stash your cash into a savings account anyway. It gets you into the habit of saving and seeing your account grow can motivate you in your battle against debt. Even if you only save $20 a week, that’s $1,040 a year before interest. Tell yourself that next year at this time you will have that much in your savings account, and stick to it!
Up Your 401k Contribution 1 percent
If you’re not yet saving for retirement, start. If not, up your contribution by 1 percent. You will hardly miss the small additional amount deducted from your paycheck, but over your career it will amount to thousands of extra savings.
Start A Spend-Nothing Day
Designate one day a week that you do not spend a single penny. (Mondays suck anyway, so they work well for me). Make your own coffee, pack your lunch, and resist the urge to pick up anything else. Once you do it regularly for a few weeks you might find the habit starts to seep into other days of the week and you’ll save bundles!
Find $100 (or more) A Month
You don’t need a second full-time job to increase your income. In fact, making an extra $100 a month can be rather easy. Sure, you can dig around your car and couch for loose change, but that might only work once. After that, consider starting a blog, making something you can sell, or doing odd jobs one weekend a month.
Start Keeping Track Of Your Money
Personal finance software packages are getting easier to use, and cheaper, and have even gone online. That means there is no excuse for using one. Established programs like Mvelopes and Mint.com are good options for online money management systems.
It doesn’t look like the cost of gas is going down anytime soon, so cutting back on the miles you drive is a sure-fire way to save a few bucks. Consolidate errands, carpool, or just stay in an extra night each week.
Give Something Back
True, this resolution won’t make you immediately wealthier (in fact it will put a dent in your wallet), but the mere fact that we are resolving to save, pay down debts, and invest means that we are more fortunate than many. Donate something to your favorite cause this year, and don’t wait until the holidays when money is already tight. Donate when you have a bit extra anyway such as when you get a bonus or a tax refund.
Invest in Yourself
This one is easy because you actually get to spend money on yourself! But I’m not talking about going out and buying an expensive new outfit (unless you have a huge job interview tomorrow, perhaps). What I mean is take a class, attend a seminar, or read a book that will help you improve yourself and further your career or financial goals.
Take a Break
See, I told you these resolutions would be easy. Having worked myself to the bone for several of the last few years, I can’t recommend rest and relaxation enough. No, I’m not talking about flaking out at work like in Office Space, but you should take a personal day now and then and a vacation if you can. Even if you can’t afford to travel somewhere, spend a few days doing something you enjoy and not thinking about work or money. After all, there’s no point in making money if you’re not enjoying life.
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