This year, pick a New Year's resolution for your money and pursue small changes over time. Need a place to start? Try one of the following resolutions and come up with a plan to stick with it.
1. Decide What You Care About
The point of managing money well is to be able to use it on things you actually care about. So, what do you care about? This is different for everyone and there are no right or wrong answers, but you need to know what your goals are if you're going to achieve them. This year, spend some time thinking about what matters to you so we can start to shape your finances around your priorities.
2. Make and Stick to a Budget
I know, I know, we’ve been over this, but it's so important. If you want to achieve your financial goals you need to know where your money is going. Need somewhere to start? Check out our series on Budgeting to Reflect Your Values.
3. Create an Emergency Fund
This year don't let a car repair, medical bill, or other unexpected expense cause you financial stress. Stash some money away to use when an emergency pops up. In an ideal world you'll have 3-6 months of expenses in the bank, but if that sounds daunting start by putting one month of expenses between you and your next hassle. You'll thank thank yourself for this one, trust me.
4. Cut Unnecessary Expenses
Are you still enjoying that subscription you signed up for a year ago? Do you really need cable now that you have Netflix, Hulu, and GooglePlay? Could you maybe cut back on one or two drinks or dinners out a month? Take a look at your expenses and see if any can be reduced or eliminated.
Need some places to start? Try these:
- Check to make sure you're getting the lowest possible rate on your cable, internet, and phone bills
- Get quotes on your Home and Auto insurance with different carriers to see if you can get a better rate
- Go through your monthly bills to see if any expenses can be eliminated
- Take steps to make your house more energy efficient
- Pack lunches
- Invite friends to your house instead of going out
5. Pay off Debt
Pick a debt you want to reduce or eliminate in 2018. Decide how you're going to attack it. Have a little extra monthly cashflow? Consider setting up automatic payments above the minimum balance. Get paid bonuses or have a way of making extra income? Decide in advance that some or all of the extra money will go to debt.
Feel overwhelmed by your amount of debt? Don't be discouraged. You don't have to pay off the whole amount this year. Instead, pick an amount and a loan you want paid off by the end of the year and judge your progress but that goal rather than the overall amount. The process might be slow, but it's the little amounts over time that are going to pay off.
6. Save For a Goal
The New Year is a great time to reflect on your goals and hopes for the future. See a house, or car, or kid, or trip in that future? Start saving now. Even if the goals are far away, you're deciding right now whether you want to achieve them by deciding whether or not you're willing to plan and sacrifice for them.
7. Save for Retirement
Do yourself a favor. Take advantage of the magic of compound interest. Start saving for retirement now, even if it's a small amount. Need some inspiration? Check out the Potential Impact of Saving for Retirement When You're Young.
8. Invest In Yourself
This year, think of ways you plan to invest in yourself. Take care of your health. Learn a new skill or take a class. Read some books. Prioritize and develop your relationships. Go on vacation. Cheesy as it sounds, you are your most valuable asset, and you're worth the investment.
About the Author
Stephanie (Custer) Vail is an LPL Financial Advisor with the Custer Financial Advisors team. She lives in Grand Rapids, Michigan and specializes in helping millennials with financial literacy and financial planning. To learn more about Stephanie and Custer Financial Advisors, visit www.CusterFinancialAdvisors.Com or email Stephanie at SVail@lpl.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. For advice specific to your situation, please contact us.