The holidays are behind us and it’s time to look ahead to the new year. You may have already given some thought to your New Year’s resolutions. Perhaps you want to lose weight or travel more. Or, maybe you want to reach new financial goals.
Achieving financial success doesn’t have to be difficult. But, it does take a solid plan and dedication. Is 2018 going to be the year you get ahead and perhaps save more money? If so, read on and make sure you follow these 8 tips to get started down the right path.
Become a goal setter
Having defined goals can make a difference in all aspects of your life. It’s nearly impossible to attain anything when you don’t have a clear idea about what your end goal is. So, make sure you define your goals and break them into bite-sized pieces. For example, perhaps you want to increase your contribution to your retirement account or pay off your credit card debt. While becoming financially successful is the big picture goal, it may take many smaller steps to get there.
Change the way you think about money
If you want to make a real change with your finances, it starts with the way you approach money. This often means dropping the excuses and making a change in your life. According to an American Psychological Association study, 71 percent of adults report money as a major stress in their lives. This doesn’t need to be the case.
Instead, prioritize what is most important to you. Do you need a brand new iPhone or will an older model work? Do you need to buy a new pair of shoes or will the shoes you have last a little longer? The less you spend each month, the more opportunity you have to save.
Budget, budget, budget
Everything starts with a budget. It’s crucial to understand how much money is coming in each month and how much is being spent. Without this information, you’ll be in the dark when it comes to your financial state. But, once you have your budget set, you’ll have a better idea how much you can save each month.
To get going, pick a budgeting tool to help make the process easier. Now, get to work. Before you know it, budgeting will be a normal part of your routine each month.
Build an emergency fund
One of the best things you can do to protect your finances is to build an emergency fund. Ideally, you should have anywhere from three to six months worth of expenses available in your rainy day fund. This will provide you with a cushion to fall back on in case of a job loss or another serious strain on your finances.
For a starting goal, aim to save $1,000 as quickly as possible. While you should work within your budget, the faster you save, the faster you’ll reach a sense of financial security. Once you’ve saved the first $1,000, you can try saving even more.
Chime can help you speed up the saving process with its automatic savings feature. Each transaction you make with your Chime card is rounded up to the nearest dollar. The rounded up amount is then transferred to your savings account. In addition, you can also elect to have 10 percent of every paycheck automatically moved into your savings account.
Set up automatic transfers to your retirement accounts
If you have a workplace 401(k), there’s a good chance your contributions are already deducted automatically from your paycheck. However, if your primary retirement account is an IRA or another type of retirement plan, you’re in charge of your own contributions. When income is tight, this is one of the easiest items to cut from your budget. Instead, set up automatic contributions. This way you are always paying yourself first.
Make sure your bills are set to autopay
One of the worst ways to get stuck paying late fees is to forget about paying a bill. Setting up autopay on things like your mortgage, utility bills, insurance, cable, and Internet will help eliminate this concern. Just make sure you check in periodically to ensure that the correct amounts are being deducted.
Work to reduce your debt
Americans have more credit card debt than ever before. In June 2017 this debt amounted to more than $1.021 trillion. If you are contributing to this staggering figure, then you should make paying off your debt a priority. Once your debt is gone, you can use the extra money in your budget to start creating wealth.
Plan a financial date night
Final words: you can achieve financial success
As you can see with the steps above, achieving financial success doesn’t have to be difficult. You just need to be willing to work hard, set goals, and make changes in your life. Are you ready to make 2018 the year you hit your financial goals?