Many people are looking to improve their finances this year, but have no idea how on earth to achieve this goal!
If you are struggling to get ahead financially, just the idea of getting control of your finances can seem intense.
I’m not going to lie to you and tell you that improving your finances is easy, but it is definitely possible!
I spoke about this topic on my Savings Segment on Fox. Watch the replay video here:
Set A Goal, and Several Benchmarks
We are automatically motivated by outcomes.
That means if you can clearly identify what goal you want, then it will make it easier to choose daily decisions to work towards that same goal.
You will be even more successful if you break down your goals into monthly “benchmarks” that you’ll need to reach to help you meet your longer-term goal later in the year.
Having a clear plan will show you what specific changes you need to make to be able to achieve your goals.
For example, if you know you want to save $1,000 this year to fill your emergency fund, that’s your big goal. Then you break that down by monthly benchmarks (divide $1,000 by 12 = $84) to make the goal feel more attainable.
Then, finally, identify the specific changes you can make that will help you achieve the $84 monthly goal. Maybe you just need to cut off cable to save money. Or you could use coupons to reduce your grocery budget by that $84 each month.
Identifying your goal, and actually writing it down, helps your brain start to think about how you can attain that goal.
Automate Your Savings
If you aren’t contributing to your savings, it’s time to start! And it’s super easy to automate so you won’t even notice!
Think about this, if you were to set up a direct deposit of $50 each month, you will have $600 at the end of the year.
You’ll be so glad if you just, “Set it and forget it!”
Check Your Credit Score
While many people don’t think to check their credit score, it’s essential to check in case there are errors that need to be fixed!
Fixing errors takes some time and knowing what might need to be repaired is the only way you can actively improve your credit score so you can stay on the right track with your financial goals.
And it’s FREE, so you have no financial excuse!
Make An Extra Payment On Your Debt
Something you can do right now to make some progress on your debt situation is to make an additional payment.
Now, I know what you are thinking… how am I going to afford that?
I’ve got some easy things to do below, and I realize you may not be able to pay off your entire balance today, but every little bit will help.
Instead of caving and buying a candy bar at the grocery checkout, put that money toward your debt!
Those small dollars here and there will add up quick!
Note: If you have different types of debt (or more than one monthly payment), put your one extra payment toward the debt with the highest interest rate.
Make A Grocery List
If you don’t usually shop with a list, you need to start!
Trust me, I know how easy it is to get caught up in the hustle of just getting INSIDE the store in order to rush to get the shopping done.
But believe me, when you make a list before walking in the store, it not only ensures you actually get the items you went in for (Ever done that before?
Just as you get home you realize you never bought the most important item you went to the store to get in the first place!), but it also ensures you stay grounded and on track not to make impulse purchases because you have no real guide to follow.
Track Your Spending
Mental notes are not a right way to track your spending.
It’s easy to dismiss those dollars and cents and then find yourself left with no money after just one week.
If you are dedicated to sticking to your budget, then you need to track every dollar that comes in and goes out.
Lower Your Monthly Bills
Did you know that you can lower some of your existing bills just making a quick call? Take a look at your monthly spending and see if there are any bills you can reduce so you can put that money towards your Big Financial Goal!
Here are three things that would make a nice big dent in your monthly finances:
1. Shop Around For Car Insurance
This might sound like a pain, but switching car insurance companies could save you hundreds each month! Take a few minutes to sit down and shop around for car insurance.
You can do it all online, and give them your cell phone number so you can screen the calls (by sending them to voicemail) before talking to anyone.
2. Look For A Cheaper Cell Phone Plan
Do you know what the average person pays for a cell phone plan? Around $40 a month!
There are a ton of phone companies out there offering cell phone plans for much less.
If your phone is not under contract, take a look around and see what prices are out there.
3. Ask Your Credit Card Company For A Lower Interest Rate
Calling your credit card company to see if they will reduce your interest rate could save you hundreds a month in interest.
If you are in credit card debt, this is even more important because a lower interest rate will help you pay off your balance even quicker.
Making a couple simple phone calls to ask if you can get a better rate for car insurance, or cell phone bill and lastly the credit card company could potentially save you a lot of money, and think about this, the worst that could happen is they say no. That’s worth it!
Maximize Your 401k
The last thing you can do to improve your financial situation this year is to see if your employer matches your retirement contributions, and you should try your best to do anything you can to save that matching amount.
If you’re already at the price matching point, then try increasing your 401k contributions by 1%.
One percent might not sound like much, but even one percent can make a big difference over the course of several years when considering the compounding interest.
Remember that you have the power to change your financial life for this year. By setting goals, setting up alarms/appointments with yourself to review those goals, checking your credit score and setting up an easy way to track your spending as well as calling to negotiate a couple of your bills then making a list before you go grocery shopping will help you have a great financial start this year!
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